A factory operates at 0·8 p.f. lagging and has a monthly demand of 750 kVA. The monthly power rate is Rs 8·50 per kVA. To improve the power factor, 250 kVA capacitors are installed in which there is negligible power loss.
The installed cost of equipment is Rs 20,000 and fixed charges are estimated at 10% per year. Calculate the annual saving effected by the use of capacitors.