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.
