You are right. The motel received $3,750 less, which is 60% of $6,250, the amount it would have earned.
Assuming a fully booked motel at $125/room per night with 25 rooms, the motel should make on any given night: $125 x 25 = $3,125. For two nights, the motel should earn $3,125 x 2 = $6,250. But, since the river flooded and 60% of the reservations were canceled, the motel lost $6,250 x 0.60 (or 60%) = $3,750.
