Econo-Cool air conditioners cost $355 to purchase, result in electricity bills of $161 per year, and last for 5 years. Luxury Air models cost $555, result in electricity bills of $122 per year, and last for 8 years. The discount rate is 20%.

a. What is the equivalent annual cost of the Econo-Cool model? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

$279.73

b. What is the equivalent annual cost of the Luxury Air model? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

$266.53

d-1. Now you remember that the inflation rate is expected to be 10% per year for the foreseeable future. What is the equivalent annual cost of the Econo-Cool and Luxury Air model? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

ECONO-COOL. LUXURY AIR

EQUIVALENT ANNUAL COST. _________%. ____________%