An environmentally friendly

3,000-square-foot

green home (99% air tight) costs about

6%

more to construct than a same-sized conventional home. Most green homes can save

17%

per year on energy expenses to heat and cool the living space. For a

$245,000

conventional home with a heating and cooling bill of

$2,000

per year, how much would have to be saved in energy expenses per year to justify this home (i.e., B-C ratio greater than or equal to one)? The discount rate is

11%

per year, and the expected life of the home is

22

years.

Click the icon to view the interest and annuity table for discrete compounding when the MARR is

11%

per year.

Question content area bottom

Part 1

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would have to be saved in energy expenses per year to justify this home. (Round to the nearest dollar.)