Ahomeowner in a sunny climate has the opportunity to install a solar water heater in his home for a cost of $2900. after installation the solar water heater will produce a small amount of hot water every day, forever, and will require no maintenance. the homeowner's water bill is thus lowered by a fixed amount every year, forever. how much must the homeowner save on water heating costs every year if this is to be a sound investment? (the interest rate is 5% per year.) a. $145 b. $160 c. $175 d. $190

correct option is A. $145  

Explanation:

given data

investment cost = $2900

interest rate = 5% per year

solution

formula for present value of perpetuity is

investment cost = fixed cash saving per year ÷ interest rate    1

put her value we get fixed cash saving per year that is

saving per year cost =  $2900 × 5%

saving per year cost =  $2900 × 0.05

saving per year cost =  $145

so correct option is A. $145  

a progressive tax is a tax that imposes a lower tax rate on low-income earners compared to those with a higher income, making it based on the taxpayer's ability to pay. that means it takes a bigger percentage from high income earners than it does from low income people.