Western Refining purchased a model MTVS peristaltic pump for injecting antiscalant at its nanofiltration water conditioning plant. The cost of the pump was $1200. If the chemical cost is $11 per day, determine the equivalent cost per month (pump plus chemicals) at an interest rate of 1% per month. Assume 30 days per month and a 4-year pump life.
What will be an ideal response?
Chemical cost/month = 11(30) = $330
A = 1200(A/P,1%,48) + 330
= 1200(0.02633) + 330
= $361.60 per month
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