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Question 4 20 pts Your annual bonus this year was $15,000. You decide to use the money to remodel your bathroom or install solar panels on your roof. In either case, you will spend the entire $15,000. If you install solar panels, you will save $100 per month on your electric bill, each month, for 120 months, starting next month. If you remodel your bathroom, you expect to increase the value of the house by $9,000 today. If your investments earn 4% APR (compounded monthly), which alternative adds more to (or subtracts less from) your wealth in present value terms and by how much? O Remodeling the bathroom losses less by $890 O Remodeling the bathroom losses less by $877 O The solar panels lose less by $877 O The solar panels lose less by $890

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- 2x Σ AutoSum : A PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins % Cut Calibri -11AA = = = Dr Wrap Text General Ea Copy Paste BI U D- DA Merge & Center - Format Painter $ % , :.: Conditional Format Cell Formatting as Table Styles Clipboard Font Alignment Number Styles J672 M N Insert Delete Format Fill 2 Clear Sort & Filter Editing Find & Select Cells O P Q R 671 IF SOLAR PANEL IS INSTALLED SAVINGS = PMT = 100 APR = 4% MONTHLY RATE = 0.33333333% NO OF MONTHS 120 672 673 674 675 676 677 678 679 680 681 682 683 684 PVA = PVA = PVA = PVA = PMT*(1/r)*(1-(1/(1+r)^n)) 100*(1/0.333333333%)*(1-(1/(1+0.333333333%)^120)) 100* 98.77017488 9877.02 IF YOU REMODEL BATHROOM PV = 9000 685 686 ANSWER THE SOLAR PANEL LOSE LESS BY 877 687 688 689 H N CAP STRU VALUE profit margin loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPONPER APR CPI ear FVA < > LOAN OPTIONSpv, fv, annuity ferences pva 52 BO 53 130% Rea _ 0 + DO 4 * 4 OENG 29-10-2019