Sales of bottled water in the United States totaled 34.0 gallons per person in 2014. Evian, a high-quality natural spring water, costs about 60¢ per bottle, while a local brand of purified municipal water may cost only 25¢ per bottle. On average, a local municipal water utility may provide drinkable tap water for $2.90 per 1000 gallons. If the average person drinks two bottles of water per day or uses 5 gallons per day to obtain the same amount of water from the tap, what are the present worth values per person for 1 year of drinking tap water versus bottled water using (a) Evian, and (b) local-brand bottled water? Use an interest rate of 6% per year, compounded monthly, and 30 days per month.
Sales of bottled water in the United States totaled
34.0 gallons per person in 2014. Evian, a high-quality
natural spring water, costs about 60¢ per bottle, while
a local brand of purified municipal water may cost
only 25¢ per bottle. On average, a local municipal
water utility may provide drinkable tap water for
$2.90 per 1000 gallons. If the average person drinks
two bottles of water per day or uses 5 gallons per day
to obtain the same amount of water from the tap,
what are the present worth values per person for
1 year of drinking tap water versus bottled water
using (a) Evian, and (b) local-brand bottled water? Use an interest rate of 6% per year, compounded
monthly, and 30 days per month.
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