Wealth in present value terms

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Your annual bonus this year was $15,000. You decide to use the money to remodel your bathroom or install solar panels on your roof. In either case, you will spend the entire $15,000.

If you install solar panels, you will save $100 per month on your electric bill, each month, for 120 months, starting next month.

If you remodel your bathroom, you expect to increase the value of the house by $9,000 today.

If your investments earn 4% APR (compounded monthly), which alternative adds more to (or subtracts less from) your wealth in present value terms and by how much?

The solar panels lose less by $877

The solar panels lose less by $890

Remodeling the bathroom losses less by $890

Remodeling the bathroom losses less by $877

Reference no: EM131846765

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