Calculate annual cost from daily, weekly, monthly, quarterly or yearly expenses, or from purchase price, resale value and useful life.
Cost Per Year Formula
The following equation annualizes an average daily cost using a365-day year. The calculator also supports regular billing frequencies, straight-line purchase cost after resale, and simple average annual cost changes.
- Where CPY is the cost per year ($/year)
- ADC is the average daily cost ($)
To annualize a constant average daily cost using this model, multiply it by365. For recurring bills, the calculator uses365 daily,52 weekly,26 two-week,12 monthly,4 quarterly or1 yearly payment per year; these are nominal billing conventions and do not account for actual billing dates or leap years.
What is Cost Per Year?
Definition:
Cost per year expresses an expense on an annual basis. A purchase can also be allocated evenly across an entered useful life after subtracting its expected remaining value. This simple allocation excludes financing and operating costs, and is not a tax depreciation calculation.
How to Calculate Cost Per Year?
Example Problem:
The following example outlines the steps and information needed to calculate Cost Per Year.
First, determine the average daily cost. In this example, we are looking at a service for streaming. The average daily cost of the streaming is found to be $5.00.
Next, determine the yearly cost using the formula above:
CPY = ADC * 365
CPY = 5*365
CPY = $1,825.00 / year
