A company starts the period with 500 customers, gains 120 new customers, and ends with 580 customers. What is the customer retention rate for the period?

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Multiple Choice

A company starts the period with 500 customers, gains 120 new customers, and ends with 580 customers. What is the customer retention rate for the period?

Explanation:
Retention rate tells you what portion of the original customers are still with the company at the end of the period. Start with 500 customers. During the period, 120 are new, and you end with 580. The number retained from the original group is the ending total minus the new customers: 580 − 120 = 460. So the retention rate is 460 out of 500, which is 460/500 = 0.92, or 92%. This matches the given data; other percentages would imply a different count of retained or new customers and don’t fit the numbers provided.

Retention rate tells you what portion of the original customers are still with the company at the end of the period. Start with 500 customers. During the period, 120 are new, and you end with 580. The number retained from the original group is the ending total minus the new customers: 580 − 120 = 460. So the retention rate is 460 out of 500, which is 460/500 = 0.92, or 92%. This matches the given data; other percentages would imply a different count of retained or new customers and don’t fit the numbers provided.

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