Starting your own business can be exciting and daunting at the same time. Busine

Question

Starting your own business can be exciting and daunting at the same time. Businesses use math when managing finances, determining production levels, designing products and packaging, and monitoring labor. A bakery can be a highly profitable and rewarding business.

Initial Budget:
$80,000 loan from family
$38,250 small business loan from bank
All loans to be repaid in 10 years

You have recently found a location for your bakery and have begun implementing the first phases of your business plan. Your budget consists of an $80,000 loan from your family and a $38,250 small business loan. These loans must be repaid in full within 10 years.

You will use 25% of your budget to rent business space and pay for utilities.

Question:
d. Imagine an investor has increased your budget by $22,250. The investor does not need to be repaid. Rather, he becomes part owner of your business. Will the investor contribute enough money to meet the cost of rent and utilities? Support your answer and write an equation or inequality that illustrates your answer.

Explanation / Answer

two ways to approach this... the new contribution is or isn't included when the 25% calculation is done if it is included... 0.25(80000+38250+22250) >= 22250 0.25(140500) >= 22250 35125 >= 22250 the cost of rent and utilities is 35125 which is more than the new 22250 so it does not cover the cost if it is not included... 0.25(80000 + 38250) >= 22250 0.25(118250) >= 22250 29562.50 >= 22250 the cost of rent and utilities is 29562.50 which is still more than the new 22250 so it does not cover the cost

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