troubleshooting Question

Excel - Calculating Payback period

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gh_userFlag for Australia asked on
Microsoft Excel
8 Comments1 Solution310 ViewsLast Modified:
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?
ASKER CERTIFIED SOLUTION
Alexandre Michel
Manager; IT Consultant

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