Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:

Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

sorry about that, I meant "initial Value" not "initial year"

"Barb Reinhardt" wrote:

It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:

Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

I can't make sense of what you wrote.
Also, I need to make sure that the calculated value is the sum of each year
including interest. This should be calculated by adding year1 + year2 + year3
etc
year2 and up should be calculated by =Year1^(1.04*n) where n = the year#

"Barb Reinhardt" wrote:

It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:

Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

Eric, you need to define your problem much better. Barb gave you an excellent
response based on your first request. Also, you need to understand future value
better, it's "Amount*(1.04^n)", not "Year1^(1.04*n)".

So, it's over to you. Define your problem, preferably with an example which
shows which result you want. You will get an answer.

--
Regards,
Fred


"Eric" wrote in message
...
I can't make sense of what you wrote.
Also, I need to make sure that the calculated value is the sum of each year
including interest. This should be calculated by adding year1 + year2 + year3
etc
year2 and up should be calculated by =Year1^(1.04*n) where n = the year#

"Barb Reinhardt" wrote:

It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:

Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

I should have written

Final Value = 2* Initial Value

Final Value = Initial Value * 1.04^n

2 * Initial Value = Initial Value *1.04^n


"Eric" wrote:

sorry about that, I meant "initial Value" not "initial year"

"Barb Reinhardt" wrote:

It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:

Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

Please google for "Rule of 70".

Eric wrote:

I can't make sense of what you wrote.
Also, I need to make sure that the calculated value is the sum of each year
including interest. This should be calculated by adding year1 + year2 + year3
etc
year2 and up should be calculated by =Year1^(1.04*n) where n = the year#

"Barb Reinhardt" wrote:


It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:


Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

Sorry about all the confusion, I'll try it again.

If there is a 4% increase each year over the previous year, how many years
it will take until the sum of the years will equal A1

The values I will input are "initial year cost" and A1

I am looking to calculate the value of each year (the first year being user
defined) and then add all the years together until they equal the value in
A1. The Returned value should be something like 8.2 years.

Thank You for your help, patience and expertise,

Eric

"Fred Smith" wrote:

Eric, you need to define your problem much better. Barb gave you an excellent
response based on your first request. Also, you need to understand future value
better, it's "Amount*(1.04^n)", not "Year1^(1.04*n)".

So, it's over to you. Define your problem, preferably with an example which
shows which result you want. You will get an answer.

--
Regards,
Fred


"Eric" wrote in message
...
I can't make sense of what you wrote.
Also, I need to make sure that the calculated value is the sum of each year
including interest. This should be calculated by adding year1 + year2 + year3
etc
year2 and up should be calculated by =Year1^(1.04*n) where n = the year#

"Barb Reinhardt" wrote:

It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:

Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

At 4 % the number will be a tad over 17 years. Unless of course, this is
one of those "magic money" schemes, and then the number of years becomes
whatever the mark will believe.

Eric wrote:

Sorry about all the confusion, I'll try it again.

If there is a 4% increase each year over the previous year, how many years
it will take until the sum of the years will equal A1

The values I will input are "initial year cost" and A1

I am looking to calculate the value of each year (the first year being user
defined) and then add all the years together until they equal the value in
A1. The Returned value should be something like 8.2 years.

Thank You for your help, patience and expertise,

Eric

"Fred Smith" wrote:


Eric, you need to define your problem much better. Barb gave you an excellent
response based on your first request. Also, you need to understand future value
better, it's "Amount*(1.04^n)", not "Year1^(1.04*n)".

So, it's over to you. Define your problem, preferably with an example which
shows which result you want. You will get an answer.

--
Regards,
Fred


"Eric" wrote in message
...

I can't make sense of what you wrote.
Also, I need to make sure that the calculated value is the sum of each year
including interest. This should be calculated by adding year1 + year2 + year3
etc
year2 and up should be calculated by =Year1^(1.04*n) where n = the year#

"Barb Reinhardt" wrote:


It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:


Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

Isn't that when the value would double? This has nothing to do with when it
will double. A1 is the investment cost and the "first year value" is a
totally different number.

Here is what I am doing. We are a Solar Electric Contrator, by installing
solar on your home we can wipe out your electric bill. I want to know how
long it will take until the cost of the Solar Electric system (the value in
A1) will equal the electricity that they would have been paying assuming that
electricity increases 4% each year over the past year. We know our customers
current year cost of electricity and cost of Solar Electric system.

"Bob I" wrote:

At 4 % the number will be a tad over 17 years. Unless of course, this is
one of those "magic money" schemes, and then the number of years becomes
whatever the mark will believe.

Eric wrote:

Sorry about all the confusion, I'll try it again.

If there is a 4% increase each year over the previous year, how many years
it will take until the sum of the years will equal A1

The values I will input are "initial year cost" and A1

I am looking to calculate the value of each year (the first year being user
defined) and then add all the years together until they equal the value in
A1. The Returned value should be something like 8.2 years.

Thank You for your help, patience and expertise,

Eric

"Fred Smith" wrote:


Eric, you need to define your problem much better. Barb gave you an excellent
response based on your first request. Also, you need to understand future value
better, it's "Amount*(1.04^n)", not "Year1^(1.04*n)".

So, it's over to you. Define your problem, preferably with an example which
shows which result you want. You will get an answer.

--
Regards,
Fred


"Eric" wrote in message
...

I can't make sense of what you wrote.
Also, I need to make sure that the calculated value is the sum of each year
including interest. This should be calculated by adding year1 + year2 + year3
etc
year2 and up should be calculated by =Year1^(1.04*n) where n = the year#

"Barb Reinhardt" wrote:


It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:


Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

Yes it would be the point at which the initial cost would appear to have
doubled, but your explanation does not even remotely resemble what you
asked. Now we are beginning to see what you actually want. Now, does the
owner have to pay for this installation? If so then there is the cost
of the money to install it. If you ignore the cost of money, you can
also ignore the inflation side. Now the number of years will be equal to
the annual electrical cost divided into the initial cost of the
equipment. If on the other hand you want to plug inflation in, you
must also allow for the cost of the money for the initial purchase. At
that point the pay back becomes longer, as the money cost is invariably
greater than inflation. So the question is what is the real time to
offset the cost of purchase when the real costs and savings are allowed
for? I suggest you outline all the items that need to be accounted for,
and then the math expression can be written.

Eric wrote:

Isn't that when the value would double? This has nothing to do with when it
will double. A1 is the investment cost and the "first year value" is a
totally different number.

Here is what I am doing. We are a Solar Electric Contrator, by installing
solar on your home we can wipe out your electric bill. I want to know how
long it will take until the cost of the Solar Electric system (the value in
A1) will equal the electricity that they would have been paying assuming that
electricity increases 4% each year over the past year. We know our customers
current year cost of electricity and cost of Solar Electric system.

"Bob I" wrote:


At 4 % the number will be a tad over 17 years. Unless of course, this is
one of those "magic money" schemes, and then the number of years becomes
whatever the mark will believe.

Eric wrote:


Sorry about all the confusion, I'll try it again.

If there is a 4% increase each year over the previous year, how many years
it will take until the sum of the years will equal A1

The values I will input are "initial year cost" and A1

I am looking to calculate the value of each year (the first year being user
defined) and then add all the years together until they equal the value in
A1. The Returned value should be something like 8.2 years.

Thank You for your help, patience and expertise,

Eric

"Fred Smith" wrote:



Eric, you need to define your problem much better. Barb gave you an excellent
response based on your first request. Also, you need to understand future value
better, it's "Amount*(1.04^n)", not "Year1^(1.04*n)".

So, it's over to you. Define your problem, preferably with an example which
shows which result you want. You will get an answer.

--
Regards,
Fred


"Eric" wrote in message
...


I can't make sense of what you wrote.
Also, I need to make sure that the calculated value is the sum of each year
including interest. This should be calculated by adding year1 + year2 + year3
etc
year2 and up should be calculated by =Year1^(1.04*n) where n = the year#

"Barb Reinhardt" wrote:



It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:



Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

Ok, hopefully this is a a lot easier to understand.

Q1 Yes the customer pays for the Solar Electric System (which includes
installation) That is the value in A1

Q2 The real question is how long will it take for the customer to break
even? In other words, how many years will pass until A1 = the sum of the
amount they would have spent on elecricity, given that electricity cost
raises 4% over the previous year and the last one year they spent on
electricity (which is found in cell B1).

That should be calculated as follows

A B
1 324.65 100

Given those to values and also knowing that Electricity raises every year 4%
over the previous year, I want Excel to caclulate years of pay back.
It should look something like this:

=sum(104,108.16,112.4864)
which equals 324.65 which means that in exactly 3 years the system would pay
for itself. The returned value would therefore be 3.0

As the values in A1 & B1 change payback time number of years to calculate
for will change drastically.

Hopefully this is much easier to understand. Thank you for your patience.

OK. Say you have the following:

A1: The amount the solar panel costs
A2: The amount they currently pay in electricity every year
A3: Inflation rate (4%)

You want to know how long it will take for payments of $A2 compounded at A3% to
equal A1. If so, use:

=nper(a3,a2,0,-a1)

--
Regards,
Fred


"Eric" wrote in message
...
Sorry about all the confusion, I'll try it again.

If there is a 4% increase each year over the previous year, how many years
it will take until the sum of the years will equal A1

The values I will input are "initial year cost" and A1

I am looking to calculate the value of each year (the first year being user
defined) and then add all the years together until they equal the value in
A1. The Returned value should be something like 8.2 years.

Thank You for your help, patience and expertise,

Eric

"Fred Smith" wrote:

Eric, you need to define your problem much better. Barb gave you an excellent
response based on your first request. Also, you need to understand future
value
better, it's "Amount*(1.04^n)", not "Year1^(1.04*n)".

So, it's over to you. Define your problem, preferably with an example which
shows which result you want. You will get an answer.

--
Regards,
Fred


"Eric" wrote in message
...
I can't make sense of what you wrote.
Also, I need to make sure that the calculated value is the sum of each year
including interest. This should be calculated by adding year1 + year2 +
year3
etc
year2 and up should be calculated by =Year1^(1.04*n) where n = the year#

"Barb Reinhardt" wrote:

It should make no difference what the initial year is (I think)

THis is your equation

Initial Value * 1.04^n = 2* Initial Year

Solve for n (which is the # of hears

1.04^N = 2
n log 1.04 = log 2
n = log 2/log 1.04
N = 17.67 years.

If the interest rate changes, your result will change.

HTH,
Barb Reinhardt

"Eric" wrote:

Hello everyone,

I am trying to create a forumla to show pay back time.

If there is a 4% increase each year over the previous year, how many
years
it will take until the accrued years will equal A1

The values I will input are "initial year" and A1

Like Fred said the formula is simply the NPER financial function. BUT
that use in this case is a piece of fiction. That assumes that money is
free, there will be no increase in the house insurance, no increase in
the apraisal of the property and taxes, that the electric company will
waive the customer or meter charges. Now given how all that has been
ignored, I would not be inclined to believe that the "system" would
provide all the electricity either. Actually this reminds me a lot of
all the schemes that popped up around 1980!

Eric wrote:
Ok, hopefully this is a a lot easier to understand.

Q1 Yes the customer pays for the Solar Electric System (which includes
installation) That is the value in A1

Q2 The real question is how long will it take for the customer to break
even? In other words, how many years will pass until A1 = the sum of the
amount they would have spent on elecricity, given that electricity cost
raises 4% over the previous year and the last one year they spent on
electricity (which is found in cell B1).

That should be calculated as follows

A B
1 324.65 100

Given those to values and also knowing that Electricity raises every year 4%
over the previous year, I want Excel to caclulate years of pay back.
It should look something like this:

=sum(104,108.16,112.4864)
which equals 324.65 which means that in exactly 3 years the system would pay
for itself. The returned value would therefore be 3.0

As the values in A1 & B1 change payback time number of years to calculate
for will change drastically.

Hopefully this is much easier to understand. Thank you for your patience.

Bob I,

What would I need to take into account so that this is realistic? Isn't the
fact that we take the customers most recent years worth of bills and apply
inflation good enough? The Solar Electric system is paid for upfront by the
customer if it's cash otherwise if it's financed we again take into account
the interest on the loan. This seems logical because inflation will apply
regardless of the loan amount or continued utility bills. Solar is the
difference between buying a house and renting one. Inflation will apply
either way.
The 4% is an inflation number I just threw out there, actually studding the
last 25 years here in CA inflation from Utility providers is almost 7% over
each previous year. With such high cost of utility supplied electricity,
Solar here in CA, is a fast growing industry. Germany and Japan are way ahead
of the US in number of installed systems. This is not some 1980 scheme! It
works because solid technology, attractive design and we have 25 year product
performance based warranties from some of the biggest businesses in the
world, BP, Mitsubishi, Sharp, SunPower, etc.. It also works because CA state
pays nearly 1/3 the cost in way of rebates for home owners. For business not
only do they pay rebates but with accelerated depreciation most business pay
only 1/3 of the initial cost. I was hoping to learn here, and I hope we both
have. If you live in CA or NJ you should check out solar, while it's not
economical for those with very little electric usage, it can save you
thousands, provided needed green energy with localized distribution. 99% of
our customers are stilled tied to the utility (you must be tied to the
utility to receive rebates) so they experience no lifestyle changes. The
utility agrees to bill our customers once yearly and buys back the extra
power they produce. This allows our customers to make extra power in the
summer, sell it to the utility (for credits) and then buy it back in the
winter.

Eric



Like Fred said the formula is simply the NPER financial function. BUT
that use in this case is a piece of fiction. That assumes that money is
free, there will be no increase in the house insurance, no increase in
the apraisal of the property and taxes, that the electric company will
waive the customer or meter charges. Now given how all that has been
ignored, I would not be inclined to believe that the "system" would
provide all the electricity either. Actually this reminds me a lot of
all the schemes that popped up around 1980!

Very few (less than 3%) of our customers have a raise in house insurance. One
of the great things about solar in CA is that solar is property tax exempt.
Apraised value does go up but that is actually another benifit to the
customer. The reason I used "Solar Electric System" instead of installed cost
is because we cover all the charges fees etc. the customer does pay $60 a
year to be utility interconnection. But, what a small price compared to there
electric bills.

"Eric" wrote:

Bob I,

What would I need to take into account so that this is realistic? Isn't the
fact that we take the customers most recent years worth of bills and apply
inflation good enough? The Solar Electric system is paid for upfront by the
customer if it's cash otherwise if it's financed we again take into account
the interest on the loan. This seems logical because inflation will apply
regardless of the loan amount or continued utility bills. Solar is the
difference between buying a house and renting one. Inflation will apply
either way.
The 4% is an inflation number I just threw out there, actually studding the
last 25 years here in CA inflation from Utility providers is almost 7% over
each previous year. With such high cost of utility supplied electricity,
Solar here in CA, is a fast growing industry. Germany and Japan are way ahead
of the US in number of installed systems. This is not some 1980 scheme! It
works because solid technology, attractive design and we have 25 year product
performance based warranties from some of the biggest businesses in the
world, BP, Mitsubishi, Sharp, SunPower, etc.. It also works because CA state
pays nearly 1/3 the cost in way of rebates for home owners. For business not
only do they pay rebates but with accelerated depreciation most business pay
only 1/3 of the initial cost. I was hoping to learn here, and I hope we both
have. If you live in CA or NJ you should check out solar, while it's not
economical for those with very little electric usage, it can save you
thousands, provided needed green energy with localized distribution. 99% of
our customers are stilled tied to the utility (you must be tied to the
utility to receive rebates) so they experience no lifestyle changes. The
utility agrees to bill our customers once yearly and buys back the extra
power they produce. This allows our customers to make extra power in the
summer, sell it to the utility (for credits) and then buy it back in the
winter.

Eric



Like Fred said the formula is simply the NPER financial function. BUT
that use in this case is a piece of fiction. That assumes that money is
free, there will be no increase in the house insurance, no increase in
the apraisal of the property and taxes, that the electric company will
waive the customer or meter charges. Now given how all that has been
ignored, I would not be inclined to believe that the "system" would
provide all the electricity either. Actually this reminds me a lot of
all the schemes that popped up around 1980!

I'd say if you are trying to make it simple, drop the inflation. Even
cash has a future value due to investment opportunities. Otherwise you
would be looking at adding 6% interest or better to fund the purchase
price, and adding "inflation to the electricity" only looks like you are
trying to accelerate the pay back. As long as you give the customer all
the info, that's a good thing. I just get really annoyed with the
"glowing future" type sales promotions that get put together for the
"green projects" that aren't financially sound, but rely on "enthusiasm"
to carry it it past the point of no return. I apologize if I sound a bit
harsh, but I've watched a lot of "energy saving products" fail to live
up to the expectations they were built up to be. A quality product that
can pay itself back before the warranty expires is a great asset, and
"Under promise, but over deliver" will take care of the long term business.

May your business be successful!

Eric wrote:

Bob I,

What would I need to take into account so that this is realistic? Isn't the
fact that we take the customers most recent years worth of bills and apply
inflation good enough? The Solar Electric system is paid for upfront by the
customer if it's cash otherwise if it's financed we again take into account
the interest on the loan. This seems logical because inflation will apply
regardless of the loan amount or continued utility bills. Solar is the
difference between buying a house and renting one. Inflation will apply
either way.
The 4% is an inflation number I just threw out there, actually studding the
last 25 years here in CA inflation from Utility providers is almost 7% over
each previous year. With such high cost of utility supplied electricity,
Solar here in CA, is a fast growing industry. Germany and Japan are way ahead
of the US in number of installed systems. This is not some 1980 scheme! It
works because solid technology, attractive design and we have 25 year product
performance based warranties from some of the biggest businesses in the
world, BP, Mitsubishi, Sharp, SunPower, etc.. It also works because CA state
pays nearly 1/3 the cost in way of rebates for home owners. For business not
only do they pay rebates but with accelerated depreciation most business pay
only 1/3 of the initial cost. I was hoping to learn here, and I hope we both
have. If you live in CA or NJ you should check out solar, while it's not
economical for those with very little electric usage, it can save you
thousands, provided needed green energy with localized distribution. 99% of
our customers are stilled tied to the utility (you must be tied to the
utility to receive rebates) so they experience no lifestyle changes. The
utility agrees to bill our customers once yearly and buys back the extra
power they produce. This allows our customers to make extra power in the
summer, sell it to the utility (for credits) and then buy it back in the
winter.

Eric




Like Fred said the formula is simply the NPER financial function. BUT
that use in this case is a piece of fiction. That assumes that money is
free, there will be no increase in the house insurance, no increase in
the apraisal of the property and taxes, that the electric company will
waive the customer or meter charges. Now given how all that has been
ignored, I would not be inclined to believe that the "system" would
provide all the electricity either. Actually this reminds me a lot of
all the schemes that popped up around 1980!