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Im trying to use excel to assess a solar panel quote given to me.

They have given me the cost of the panel. I can calculate the savings after 1 year based on the current tariff (electricity price per kwh usage). The tariff is expected to increase per year (based on index)

A need a excel formula that can calculate the number of years until the total savings match the upfront cost of the panel.

Its based on cost = savings/year (based on current tariff) x (1 + %annual increase in tariff) to the power of number of years)

Currently the variables are:

C = Cost = $7000

S = Savings/year (based on current tariff) = $1100

I = Index based on %annual increase in tariff = 3%

But my formula No. of years = LOG(C/S,I) is getting strange answer of 63.

Any suggestions?

They have given me the cost of the panel. I can calculate the savings after 1 year based on the current tariff (electricity price per kwh usage). The tariff is expected to increase per year (based on index)

A need a excel formula that can calculate the number of years until the total savings match the upfront cost of the panel.

Its based on cost = savings/year (based on current tariff) x (1 + %annual increase in tariff) to the power of number of years)

Currently the variables are:

C = Cost = $7000

S = Savings/year (based on current tariff) = $1100

I = Index based on %annual increase in tariff = 3%

But my formula No. of years = LOG(C/S,I) is getting strange answer of 63.

Any suggestions?

Last Comment

ASKER

Hi Saqib. I came up with the formula. Might not be right.

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Hi GH

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Cheers

Alexandre

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If I have, please marked the question as "Answered". Thanks

Cheers

Alexandre

ASKER

Thanks Alexandre.

Sorry..I missed seeing your answer.

It was great...well explained and tested!!

Sorry..I missed seeing your answer.

It was great...well explained and tested!!

You are welcome!

If this answered your question, can close the question and rate the answer when you have 2 minutes

Thanks

If this answered your question, can close the question and rate the answer when you have 2 minutes

Thanks

ASKER

Hi Alexandre. I cant seem to close question. (I have been able to rate your answer as best solution). I think the problem is due to question being abandoned due to my delay in responding. I have put in request to get rectified.

ASKER

WELL EXPLAINED

Microsoft Excel

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1.684488685 using 3

and

-0.527754004 using 3%

Can you show me where you got this formula from?

You can see details of Discounted Payback Period at

http://accountingexplained.com/managerial/capital-budgeting/discounted-payback-period