Capital Recovery Factor notation: CRF(EP) − 8% − 7 is interpreted how? Identify what the “8%” and the “7” specify in this factor label.

Introduction / Context:
Engineering-economy factor notation compresses key parameters into a readable tag. The Capital Recovery Factor (CRF), often written A/P, converts a present amount P into an equal annual amount A over n periods at interest rate i. Interpreting the compact label correctly avoids factor-table and calculator input errors.

Given Data / Assumptions:

• CRF(EP) refers to A/P (capital recovery) for end-of-period payments.
• “8%” denotes the nominal interest rate per year for the periods considered.
• “7” denotes the number of periods (years) n.

Concept / Approach:
The functional form is A = P * [i(1 + i)^n / ((1 + i)^n − 1)]. When you see CRF − 8% − 7, substitute i = 0.08 and n = 7. The same convention applies to other factors (P/A, F/A, P/F, etc.), where the trailing numbers specify interest and period count.

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