Question

A wind power system costs €6000 to install it saves€250 each year

Calculate the payback time

Answer 1

Explanation & Calculation

• Payback time is the time taken to recoup any capital investment.
• Then the initial cost of $\epsilon \small 6000$ can be recouped with the cumulative savings from each year.
• Then the payback time would be.

$\qquad\qquad \begin{aligned} \small t&=\small \frac{6000\epsilon}{250\epsilon / year}\\ &=\small \bold{24 \,years} \end{aligned}$