If the average rate of return of an equipment that costs $5,000 is 25 percent, its savings per year is ________.
A) $250
B) $1,250
C) $500
D) $5,000

Question

Quizplus · Accepted Answer

To find the savings per year, we need to multiply the cost of the equipment by the rate of return (as a decimal). 
25 percent as a decimal is 0.25
Savings per year = 5,000 x 0.25 = 1,250
Therefore, the correct answer is B) $1,250.

If the Average Rate of Return of an Equipment That