How it works
Purchase price plus present value of year-end maintenance is reduced by the present value of a terminal sale. This form solves for present ownership cost (same currency); enter the known quantities in Initial purchase price (same currency), Annual maintenance cost (same currency), Terminal sale amount (same currency), Annual discount rate, Number of years.
Inputs and units
| Input | Example value | What to enter |
|---|---|---|
| Initial purchase price (same currency) | 10,000 | Formula symbol: purchase. Enter a numeric value. Use a non-negative value. |
| Annual maintenance cost (same currency) | 1,000 | Formula symbol: maintenance. Enter a numeric value. Use a non-negative value. |
| Terminal sale amount (same currency) | 5,000 | Formula symbol: sale. Enter a numeric value. Use a non-negative value. |
| Annual discount rate | 10 % | Formula symbol: rate. Enter the percentage as a number: for 15%, enter 15. Use the annual rate. Must be greater than zero. Allowed range: 0.001–100. |
| Number of years | 5 yr | Formula symbol: years. Required unit: yr. Use a whole number. Must be greater than zero. Allowed range: 1–100. |
Worked example
Show example inputs and results
This example is generated by the same calculation engine using the starting values in the form. Your own inputs produce your own result.
- Initial purchase price (same currency)
- 10,000
- Annual maintenance cost (same currency)
- 1,000
- Terminal sale amount (same currency)
- 5,000
- Annual discount rate
- 10 %
- Number of years
- 5 yr
Complete example results
- Present ownership cost (same currency)
- 10,686.18015411
Reading the result
The result solves for present ownership cost (same currency) from the entered quantities. Check the result unit and the formula conditions before using it.
Questions and answers
Can I use the example values for my own calculation?
The example values illustrate the calculation. Replace every input with your own information, especially dates, rates and the selected operation.
When can I use the present ownership cost (same currency) result?
Maintenance and discount rate are constant; first maintenance is after one year and sale at final year-end. Tax, financing and sale uncertainty are excluded; rate must be positive. All monetary inputs must use the same currency; currency conversion, tax and automatic fees are excluded. The sources explain discounting equal year-end payments and a future lump sum; this ownership model combines those present values with purchase cost.
Why are some results rounded?
Results display up to 8 decimal places. Calculations use the unrounded values; very small values use scientific notation. JavaScript floating-point arithmetic can introduce tiny rounding differences.
Are my inputs sent to a server?
The calculator processes inputs in your browser. Its code does not send your values to a server.
Method sources: openstax.org · openstax.org