Question

An electric guitar costs $790, with a $235 full-replacement warranty. If the manufacturer sells 598,274 warranties andhas to honor 11% of them, how much profit did the manufacturer gain from the warranties? Show work

Answer 1

`\begin{gathered} \text{guitar cost=79'} \\ \text{warranty cost=235} \\ \text{total warranties=598,274} \\ 11\text{ \%} \\ \text{Income for warranties=}(\text{598,274})\cdot(\text{235}) \\ \text{Income for warranties=}140,594,390 \\ \text{ \%=598,274}\cdot11\text{ \%} \\ \text{ \%=65811} \\ \cos t=(\text{65811)}\cdot(\text{235)} \\ \cos t=15,465,585 \\ \text{Profit}=140,594,390-15,465,585 \\ \text{Profit}=125,128,805 \\ \text{The total profit fot warranties is \$}125,128,805 \end{gathered}`