You are considering whether or not to replace the HVAC system in your home. Your existing furnace and AC unit are very reliable, but at the same time quite inefficient. It will cost you $6,000 today to replace the system, but you will be able to save $140 a month in energy costs. Both the existing and the new system are expected to last 10 years (120 months). How much will you be able to save, in present value terms, if you decide to spend $6,000 today to replace the HVAC system in your home? Assume your personal discount rate is 6% a year with monthly compounding and the savings are realized at the end of each month. Express your answer in dollars and cents, but do not include the $ sign. If the savings are negative (i.e. it is cheaper to keep the old system), make sure to include the negative sign in your answer.

Answer rating: 100% (QA)

To calculate the present value of the savings from replac... View the full answer