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Date Submitted: 04/27/2016 04:41 PM
INTM 461-561 Assignment II
1- What is the present value of a $10,000 payment in 2015 if the discount rate is 7%?
PWF (7%, 1) = $10,000 x 0.935 = $9,350
2- Calculate the annual payments for a solar system whose initial extra cost is $10,000. Assume that the interest rate is 8% and the mortgage term is 15 years.
Pann = S x [8%1-(1+8%)-15] = $10,000 x 0.11683 = $1168.3
3- An industry obtains a mortgage of $100,000 at an interest rate of 8% over 20 years to invest in solar panels. Estimate the annual payments to repay this loan.
Pann = S x [8%1-(1+8%)-20] = $10,000 x 0.10185 = $10185
4- Rooftop solar hot water heater with collector areas of 8 m2 and storage of 640 L is installed in Phoenix, Arizona on a house that uses 160 L/day of hot water at 60°C. Assume energy required to provide hot water for the home is about 33,219.3 / (or 3368 ℎ/). Also it is estimated that 70% of the total energy required is supplied by solar energy (the solar fraction is 70%), and 30% is supplemented with an electric heater. The solar system costs $3,000 installed, whereas an electric water heater and tank for the same supply costs $800 installed.
Assuming that the electricity cost is $0.10/kW-hr and does not change over time, estimate the simple payback time for the solar hot water heater. The temperature of the water in the main from which it is to be heated is 10°C.
EnergyTotal required = 333,219.3 / (or 3368 ℎ/)
Energy supplied by solar energy = 0.7 X EnergyTotal = 0.7 X 3368 = 2357.65 kWh/yr
So 2357.65 kWh is saved each year with the Solar Collector. Now we have to calculate the cost savings associated with this energy savings and calculate the simple payback period.
Cost Savings = EnergyTotal X Cost of energy
= 2357.65 kWh/yr X $0.10/kW-hr
Cost Savings = $235.76
tsimple payback = Investment/ Annual Savings = $3000 / ($235.76/yr)
tsimple payback = 12.72years.
5- If the initial extra cost of a...