Question

An environmentally friendly 3,200 square foot green home (99% air tight) cost about 7% more to construct than a same sized conventional home. Most green homes can save 15% per year on energy expenses to heat and cool the living space. for a 264,000 conventional home with a heating and cooling bill of 3,500 per year, how much would have to be saved in energy expenses per year to justify this home? the discount rate is 9% per year, and the expected life of the home is 35 years. how much would have to be saved in energy expenses per year to justify this home.

Module 3> Chapter 10 Homework Kayla Capps& 11/4/19 19 work: Chapter 10 Homework HW Score: 0% 1 of 5 (0 complete) 1 pt Ouestion H 10,2 lalaorithmic) - X me. Mc oling bil e)? The More Info hental save 1 year, H per yea Discrete Compounding; i-9% Uniform Series Sinking Single Payment Compound Amount the icor Capital Recovery Factor Compound Amount Fund Present Present d have t Factor Worth Factor Factor Factor Worth Factor To Find A Given P To Find A To Find P Given A To Find F Given A FIA To Find P Given F To Find F Given F Given P FIP AIP AIF PIA PIF 1.0900 0.5685 1.0000 1.0000 2.0900 0.9174 0.9174 1.0900 1 0.4785 1.7591 0.8417 1.1881 2 0.3951 0.3051 2.5313 3.2781 1.2950 0.7722 3 0.3087 0.2571 0.2187 3.2397 4.5731 0.7084 1.4116 4 0.1671 5.9847 3.8897 0.6499 1.5386 5 0.2229 4.4859 0.1329 7.5233 05963 1.6771 6 0.1087 0.1987 5.0330 9 2004 0.5470 1.8280 7 11.0285 13.0210 0 5019 0.4604 0.4224 0 3875 5.5348 5.9952 0.0907 0.1807 1.9926 0.1668 0.1558 0.0768 2.1719 6.4177 0.0658 15.1929 2.3674 10 6 8052 7.1607 7.4869 17.5603 0.0569 0.1469 2.5804 11 0,0497 0.3555 20.1407 0.1397 12 2.8127 22.9534 0.0436 01336 0.3262 3.0658 13 0 1284 0 1241 26.0192 29 3609 02992 7 7862 0.0384 3.3417 14 8 0607 0.0341 0 2745 15 3 6425 nter your answel Print Done l parts showing Previous Next 12:27 11/4/2 DELL

Answer 1

Solution:

Extra cost=7% = 0.07

Saving per year=15% = 0.15

Extra Cost of home=264,000 *0.07 = $18480

Let the energy saving required per year to justify the home = x

Extra cost paid = P.v of energy saving

18480 = x * Annuity factor(9%@35 years)

x = 18480 * (A/P, 9%, 35)

X = 18480 * 0.0946

X = $1748.208

Hence

energy saving required per year to justify the home is $1748.208