Question

Trevor has just finished writing a deeply profound book titled 'The Longer I Live, the Older.' The publisher has given him two options:

1. Receive $20,000 upfront and 8% of the sales of the book.
2. Receive $50,000 upfront and 5% of the sales of the book.

What do the sales have to be for Trevor to make the same amount from each option?

a. $500,000
b. $625,000
c. $750,000
d. $875,000

Answer 1

To make the same amount from each option, the sales have to be $1,000,000. So the sales have to be $1,000,000 for Trevor to make the same amount from each option.

Step-by-step explanation:

To find the sales where Trevor will make the same amount from each option, we need to set the two options equal to each other and solve for sales.

Let's use x to represent the sales:

Option 1: $20,000 + 0.08x

Option 2: $50,000 + 0.05x

Setting the two options equal to each other:

$20,000 + 0.08x = $50,000 + 0.05x

Subtracting 0.05x from both sides:

$20,000 + 0.03x = $50,000

Subtracting $20,000 from both sides:

0.03x = $30,000

Dividing both sides by 0.03:

x = $1,000,000

So the sales have to be $1,000,000 for Trevor to make the same amount from each option.