Enter the initial cost ($), the maintenance cost ($), and the interest rate (%) into the Capitalized Cost Calculator. The calculator will evaluate and display the Capitalized Cost. 

Capitalized Cost Formula

The following formula is used to calculate the Capitalized Cost. 

CC = IC + MC*(1/(R/100))

  • Where CC is the Capitalized Cost ($)
  • IC is the initial cost ($) 
  • MC is the maintenance cost ($) 
  • R is the interest rate (%) 

How to Calculate Capitalized Cost?

The following example problems outline how to calculate Capitalized Cost.

Example Problem #1

  1. First, determine the initial cost ($). The initial cost ($) is given as 200,000 .
  2. Next, determine the maintenance cost ($). The maintenance cost ($) is calculated as  40,000 .
  3. Next, determine the interest rate (%). The interest rate (%) is found to be 15.
  4. Finally, calculate the Capitalized Cost using the formula above: 

CC = IC + MC*(1/(R/100))

Inserting the values from above yields: 

CC = 200000 + 40000*(1/(15/100)) = ($) 466,666.66


Example Problem #2

The variables needed for this problem are provided below:

initial cost ($) = 4000

maintenance cost ($) = 2000

interest rate (%) = 10

Entering these values and solving gives:

CC = IC + MC*(1/(R/100)) = ($) 24,000