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FinanceQ&A Library#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.Start your trial now! First week only $4.99!*arrow_forward*

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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%.

- 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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