NALMCO Certified Apprentice Lighting Technician (CALT) Practice Exam

If a new energy-saving lamp costs $10 and it saves $5 per year in energy costs, what is the payback period?

1. 16 months

2. 24 months

3. 36 months

4. 50 months

The correct answer is: 24 months

To determine the payback period, you need to establish how long it will take for the savings from the energy-saving lamp to equal its initial cost. In this scenario, the lamp costs $10, and it saves $5 each year. To find the payback period, you divide the cost of the lamp by the annual savings: Payback period = Cost of lamp / Annual savings = $10 / $5 = 2 years. Converting years into months, since there are 12 months in a year, 2 years equals 24 months. Thus, the payback period is correctly identified as 24 months. This calculation shows how soon the investment in the lamp pays off through energy savings, making it a vital consideration in energy-efficient technology investments.