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Payback period Formula

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  • 07-04-2010 6:27pm
    #1
    Mickeyie05
    Closed Accounts Posts: 167 ✭✭


    Hi does anyone know what the formula is for payback period?

    Here is the situation, A certain amount of capital investment is made and the savings increase by 5% each year and i want to calculate the payback period


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    #2
    bnt
    Registered Users Posts: 13,010 ✭✭✭✭bnt


    Are you thinking Net Present Value and related concepts such as discounted cash flow?

    Death has this much to be said for it:
    You don’t have to get out of bed for it.
    Wherever you happen to be
    They bring it to you—free.

    — Kingsley Amis



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    #3
    Mickeyie05
    Closed Accounts Posts: 167 ✭✭Mickeyie05


    right here how it goes?

    a homeowner spends €5000 on a new solar panel for there house
    In the first year they see a saving of €400
    the saving increases by 5% each year as fuel prices increase
    What is the payback period on the solar Panel?


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    #4
    The Big Red Button
    Closed Accounts Posts: 8,390 ✭✭✭The Big Red Button


    Mickeyie05 wrote: »
    right here how it goes?

    a homeowner spends €5000 on a new solar panel for there house
    In the first year they see a saving of €400
    the saving increases by 5% each year as fuel prices increase
    What is the payback period on the solar Panel?

    9.94979 years


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    #5
    Mickeyie05
    Closed Accounts Posts: 167 ✭✭Mickeyie05


    can you tell me the formula for how you worked that out cos i have loads to work out


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