Burn Rate Calculator

Formula

The formula to calculate the burn rate (BR) is:

\[ BR = \frac{B1 - B2}{m} \]

Where:

$ BR $ is the burn rate ($/month).
$ B1 $ is the initial amount of capital ($).
$ B2 $ is the final amount of capital ($).
$ m $ is the total number of months.

What is a Burn Rate?

A burn rate measures the total monthly spending rate that a company sees over a given period. The burn rate is typically displayed as dollars per month, but it can also be displayed as a percentage of the initial investment per month.

Example Calculation

Consider an example where:

Initial Amount of Capital (B1): $100,000
Final Amount of Capital (B2): $20,000
Total Number of Months (m): 12

Using the formula to calculate the burn rate:

\[ BR = \frac{100000 - 20000}{12} = 6666.67 \text{ dollars per month} \]

This means that the burn rate for this example is $6666.67 per month.