Scientific Converters Precise unit conversions for science & engineering.

    Loading…

    Years’ Purchase Calculator

    A freehold property earning a net 120,000 a year, capitalised at 8 %, is worth 1500000.

    %
    %
    Capitalised value =

    1500000

    Years’ purchase YP
    12.5
    Step-by-step solution
    1. YP (perpetuity) = 1/i = 1 ÷ 0.08 = 12.5
    2. Value = net income × YP = 120000 × 12.5 = 1500000

    Years’ Purchase Formula

    Value = net income × YP

    YP = 1/i (perpetual), (1 − (1 + i)^−n)/i (n years), 1/(i + s/((1 + s)ⁿ − 1)) dual rate

    Worked Example

    A freehold earning a net 1,20,000 a year at 8 %:

    1. YP (perpetuity) = 1/i = 1 ÷ 0.08 = 12.5
    2. Value = net income × YP = 120000 × 12.5 = 1500000

    GATE tip

    Use net income: gross rent minus outgoings such as repairs, taxes, insurance and management.

    More Planning, Housing and Valuation Calculators

    Frequently asked questions

    Why does a perpetual YP equal 1/i?

    An income of I forever has a present value of I/i, so the multiplier is 1/i: 12.5 at 8 %.

    When is dual-rate YP used?

    For leasehold incomes, where a sinking fund at a lower, safe rate replaces the capital at the end of the lease.

    Sources

    Last reviewed: . Factors are stored exactly and computed with 50-digit decimal arithmetic. See how we verify conversion factors.

    Cite this page

    APA

    Scientific Converters. (2026, October 15). Years’ Purchase Calculator. Retrieved October 29, 2026, from https://scientificconverters.com/calculators/years-purchase-calculator/

    IEEE

    Scientific Converters, "Years’ Purchase Calculator," scientificconverters.com. Accessed: Oct. 29, 2026. [Online]. Available: https://scientificconverters.com/calculators/years-purchase-calculator/

    Send feedback

    Found a wrong value, a missing unit or an idea? Tell us. We read every message.

    What is it about?

    We store your message, the page you were on and your email if given. See the privacy policy.