Your parents heard about the success of your business and they want to help you out. Suppose they want to give you an additional $300 to put toward your business. However, there’s a catch. If you make more than $600 additional profit, you have to give them 10% of your earnings above $600. For example, if you have earned $650, then you owe 10% of $50, or $5, to your parents.
the business earned $36,800
Will you have to pay your parents, if so, determine how much you will owe your parents
To determine if you have to pay your parents and how much you will owe them, we need to calculate the additional profit made by the business.
Additional profit = Business earnings - Initial profit
Additional profit = $36,800 - $0
Additional profit = $36,800
Since the additional profit is $36,800, which is above $600, you will indeed have to pay your parents.
Amount owed to parents = 10% of (Additional profit - $600)
Amount owed to parents = 10% of ($36,800 - $600)
Amount owed to parents = 10% of $36,200
Amount owed to parents = 0.10 * $36,200
Amount owed to parents = $3,620
Therefore, you will owe your parents $3,620.