Question

a contractor estimates that will require $16,560 of upgrades to make a home more energy efficient. She further estimates that the upgrades will save the residents $80 per month in energy bills. What is the payback time for these upgrades in months and in years and months?

Answer 1

It is given that the upgrades require $16,560 to make the home energy efficient.

It is also given that the upgrades will save $80 per month in energy bills.

Hence the number of months for payback is given by:

$M=\frac{16560}{80}=207$

Hence the cost will pay itself in 207 months.

The time in years and months is given by:

$\frac{207}{12}=17\text{ }\frac{3}{12}$

Hence the cost will pay itself in 17 years and 3 months.