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The Autocar E3 refuse truck has an energy recovery system developed by Parker Hannifin LLC that is expected to reduce fuel consumption by 50%. Pressurized fluid flows from carbon fiber-reinforced accumulator tanks to two hydrostatic motors that propel the vehicle forward. (The truck recharges the accumulators when it brakes.) The fuel cost for a regular refuse truck is $900 per month. How much can a private waste-hauling company afford to spend now on the recovery system, if it wants to recover its investment in 3 years plus a return of 14% per year, compounded semiannually? Assume no inter period compounding

İt is not a homework question.

I tried to solve it using factors, as the new system will save us half the cost of fuel per month, we can afford 450 USD per month on the new system. İt will be our annuity. I am not sure if I should use (P/A, %7,6) or find the effective interest rate first for a year than use it like (P/A,%14,xxx,3)

The answer for both formulas are different however this logic can be used for P/F,F/P so I don't understand.

DiaperHands
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Ayberk Kum
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  • Aren’t you missing some info? Such as the cost of the system? – Solar Mike Nov 08 '19 at 20:48
  • @Solar Mike No there is no info missing , this is not a whole system, you think it saves half the cost of the fuel, so we can afford that much monthly for the system. Meaning 450 per month, just the interest needs to be calculated but i dont know whether if i can use (P/A,%7,6) or i should calculate effective annual and use (P/A, %14,***,3) – Ayberk Kum Nov 08 '19 at 20:58
  • I am trying to get a grip on the logic still – Ayberk Kum Nov 08 '19 at 20:59
  • Welcome to Engineering! This looks like a [homework question](http://meta.engineering.stackexchange.com/q/121/1832) (even if it isn't homework). In order for such questions to be answered in this site, we need you to add details describing the precise problem you're having. What have you tried to solve this yourself? Please [edit] your question to include this information. – Wasabi Nov 09 '19 at 03:01

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