Question

3.50 The cost of capturing and storing all CO2 produced by coal-fired electricity generating plants during the next 200 years has been estimated to be $1.8 trillion. At an interest rate of 10% per year compounded monthly, what is the equivalent annual worth of such an undertaking over the 200 years?

Answer 1

Effective rate = (1+10/12)^12-1 = 0.1047 = 10.47%

n = 200

The equivalent annual worth would be:-

= 1.8 trillion*(A/P,10.47%,200)

= 1.8 trillion*0.1047

= 0.18846 trillion