# #34  Equivalent Annual Annuity Econo- Cool Air conditioners cost $300 to purchase, result in electricity bills of$1500 per year, and last for 5 years. Luxury Air model cost $500, results on electricity bills of$100 per year and last 8 years. The discount rate is 21%. What is the equivalent annual cost of the Econo- Cool Model?-  What is the equivalent annual cost of the Luxury Air Moel? The inflation rate is expected to be 10% per year for the foreseeable future. Redo part a & b.

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#34  Equivalent Annual Annuity

Econo- Cool Air conditioners cost $300 to purchase, result in electricity bills of$1500 per year, and last for 5 years. Luxury Air model cost $500, results on electricity bills of$100 per year and last 8 years. The discount rate is 21%.

1. What is the equivalent annual cost of the Econo- Cool Model?-
2. What is the equivalent annual cost of the Luxury Air Moel?
3. The inflation rate is expected to be 10% per year for the foreseeable future. Redo part a & b.

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