Question

A refrigerator costs $580 a year to run. A family purchases a new one for $1200 that will save them 22% annually in energy costs. How many years does it take to pay for itself

Answer 1

It will take nine years and four months for the refrigerator to pay for itself.

Explanation:

The new refrigerator which costs $1200, saves the family 22% annually in energy cost.

Since the old refrigerator costs $580 to run, we want to determine how many years it will take for 22% of $580 per year to make $1200.

22% of $580

= 580 × 0.22

= 127.6

That is, it saved then $127.6 per year.

Now,

$1200/127.6

≈ 9.4

Which means, it will take 9 years and 4 months for the refrigerator to pay for itself.