Thanks D2 and his dearly beloved are considering replacing their hot water heate

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D2 and his dearly beloved are considering replacing their hot water heater, A conventional electric hot water heater is $200 including installation. His brother and his wife move in and they estimate that a family of four uses an average of 300 litters of hot water a day. which will require $350 worth of electricity each year. The installed cost of small solar water heater system is $1,400 and will cost $60 per year on the average to operate (electricity to pump the water through the panels and to augment solar heating on cloudy days. Both systems will have a $0 salvage value at the cod of their useful lives. Based on a MARR of 12%. determine how king the solar system must operate to make it as economical as the electric system. 4 5 8 9 None above. My answer is:

Explanation / Answer

Cost of operating electric heater=$350 per year

Cost of operating solar heater=$60 per year.

Savings in cost per year=$290 per year.

Cost of purchase and installation of electric heater=$200.

Cost of purchase and installation of solar heater=$1,400.

Increase in cost =$1,400 -$200

=$1,200.

This cost is recovred by savings of $290 by number of years is obtained as follows:

Present value of accumulated savings is approximately nearer to the additional cost of of purchase and installaiton of solar heater after 6th year. ie., additional cost=$1,200 and the present value of accumulated savings due to solar heater =$1,192 at the end of year 6. So, after year 6, use of solar heater is as economical as electric heater. Answer is none of the above and it is 6 years.

Year Present value factor 12%(A) Savings per year (b) Present value of savings (C )=A*B Accumulated savings (D)=Current year C+Previous year D 1 0.892857143 $290.00 $258.93 $258.93 2 0.797193878 $290.00 $231.19 $490.11 3 0.711780248 $290.00 $206.42 $696.53 4 0.635518078 $290.00 $184.30 $880.83 5 0.567426856 $290.00 $164.55 $1,045.39 6 0.506631121 $290.00 $146.92 $1,192.31

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