Solar-based heating installation

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Reference no: EM131020443

A family is considering an investment of 150000 dollar in a solar-based heating installation. They would need to take a loan from a bank with the expected interest rate of 6% for 20 years. The solar installation is assumed to have zero rest value after 20 years (it will need to be taken out of operation or fully replaced after 20 years) and would be evenly amortized per year during the 20 years of operation. The family's yearly heating bill (without the solar installation) is expected to increase by 2% a year. Calculate the amount of the family's current yearly heating bill in [k dollar] for a break-even in the total money spent, assuming that the solar installation power will fully (and exactly) replace the current heating power.

Reference no: EM131020443

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