Question

Jamal has owned his home for about 5 years. his refrigerator needs to be replaced and jamal is thinking about buying an energy star-labeled model that will save money on his utility bills. the model he is looking at costs $598 and advertises a cost of only 12 cents per day. jamal has calculated that he spends about $132 per year on his old refrigerator. how long would it take for the new refrigerator to pay for itself in lower utility costs? round to the nearest whole year.
a. 7 years
b. 14 years
c. 5 years
d. 11 years

Answer 1

Answer - A (7 years)

WORKINGS

To calculate how long it would take for the new refrigerator to pay for itself in lower utility costs, the cost of new refrigerator will be divided by lower utility cost per year

 

Cost of new refrigerator = $598

 

TO CALCULATE LOWER UTILITY COST PER YEAR

At a cost of only 12 cents per day

Annual cost will be 12 X 365 = 4380 Cents ($43.8)

 

Cost saved annually = Cost of old refrigerator – Cost of new refrigerator.

Lower utility cost per year = $132 – $43.8

Lower utility cost per year = $88.2

 

How long would it take for the new refrigerator to pay for itself in lower utility costs?

$598 ÷ $88.2

= 6.78 years

Approximately 7 years

 

Answer 2

Answer:

A. 7 years

Explanation:

Old costs were $132. New costs are $43.80 (12 cents * 365 days)

Old minus new = annual savings

132-43.80 = $88.20

Now, we calculate how many years it will take to pay off in savings.

x= number of years

(Savings per year * number of years) = price of the fridge

$88.20x = $598

x = 6.78

Round to nearest year = 7 years