Fri, 21 Dec 2007 13:46:20 -0600 from HeyBub :
However, there is the opportunity cost to consider. $200 in a savings
account instead of a new motor, at 6% interest, generates $12 per year,
making the savings only $13.
Don't forget that interest is taxable, not to mention that a 6%
savings account is not realistic. Bankrate.com says CD rates are
still around 5% but likely to drop soon; a savings account would be
below that.
Figure 4% savings account, 28% tax bracket. Interest that you get to
keep is $8 times 0.72 a year, $5.76, so the savings would be $19.24 a
year and the payback period would be ten years and a few months.
Unless, of course, you're able to take advantage of some program that
subsidizes replacing inefficient equipment with efficient equipment.
Then the payback would be shorter.
--
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://OakRoadSystems.com/
"If there's one thing I know, it's men. I ought to: it's
been my life work." -- Marie Dressler, in /Dinner at Eight/