Question

An environmentally, friendly 2,800 square-foot green home (99% air tight) cost about 8% more to construct than a same-sized conventional home.
Most green homes can save 15% per year on energy expenses to heat and cool the living space.

For a $250,000 conventional home with a heating and cooling bill of $3,000 per year, how much would have to be saved in energy expenses per year to justify the home (e, B-C ratio greater than or equal to one?

The discount rate is 10% per year, and the expected life of the home is 30 years?

Answer 1

Answer:

2121.566 will be saved

Explanation:

Extra cost=8%

Saving per year=15%

Extra Cost of home=250000*0.08=$20000

Let the energy saving required per year to justify the home=x

Extra cost paid = P.v of energy saving

20000=x*Annuity factor(10%@30 years)

20000=x*9.427

X=2121.566