2.5 Assuming that the price of fuel is $5.00/GJ and is increasing at a rate of 4%/year while the discount rate is 6%, calculate the equivalent levelized price over 20 years. i(1+ i)* (1+i)² – 1 i'(1+i')t (1+ i')t – 1 i-j 1+j P. = xC =

2.5 Assuming that the price of fuel is $5.00/GJ and is increasing at a rate of 4%/year while the discount rate is 6%, calculate the equivalent levelized price over 20 years. i(1+ i)* (1+i)² – 1 i'(1+i')t (1+ i')t – 1 i-j 1+j P. = xC =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

2.5 Assuming that the price of fuel is $5.00/GJ and is increasing at a rate of 4%/year while the
discount rate is 6%, calculate the equivalent levelized price over 20 years.
i(1+i)
(1+i)t – 1
i'(1+ i')
(1+ i')t – 1
i-j
i' =
1+j
P. =
A
xC =

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