it costs $30,000 to retrofit the gasoline pumps at a certain filling station so
ID: 1247578 • Letter: I
Question
it costs $30,000 to retrofit the gasoline pumps at a certain filling station so the pumps can dispense E85 fuel (85% ethanol and 15% gasoline). If the station makes a profit of $0.08 per gallon from selling E85 and sells an average of $20,000 gallons of E85 per month, how many months will it take for the owner to recoup her $30,000 investment in the retrofitted pumps? the interest rate is 1% per month? it costs $30,000 to retrofit the gasoline pumps at a certain filling station so the pumps can dispense E85 fuel (85% ethanol and 15% gasoline). If the station makes a profit of $0.08 per gallon from selling E85 and sells an average of $20,000 gallons of E85 per month, how many months will it take for the owner to recoup her $30,000 investment in the retrofitted pumps? the interest rate is 1% per month?Explanation / Answer
Tot aProfit per mnth = 20000*0.08 = $1600 pm = PMT PV of Investment = $30,000 i = 1% pm no of months n = ? We use Excel 'nper' function to find n So n = nper(Rate, PMT, PV) = nper(1%,1800,-30000) = 18.32month SO owner will recoup investmnet is 18.32 Months
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