Foreseeable future-solar panels installed

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Reference no: EM13947406

Your energy bill is expected to be $200 next month (month 1) and is expected to grow at 0.5% per month for the foreseeable future (aka forever). You read recently that installing solar panels on your roof will reduce your energy bill by 25% (so month 1 would be $150) and decrease the growth of the bill to 0.25% per month for the foreseeable future. Assuming this is true, that you plan to stay in the house for the foreseeable future, and that the applicable discount rate is 12% per year, from a pure financial perspective what is the most you’d pay today to have solar panels installed immediately? Assume the panels could be installed quickly and the cost savings would start in month 1.

Reference no: EM13947406

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