Korey is planning to open a comic book store. He has developed the following expense breakdown for set-up and operation for the first year. Korey has $8,500 in savings and $25,000 in inheritance money to use to open his store. If Korey doesn’t make any changes to his initial expenses, what percent of the total set-up and operation expense will have to be funded through loans or investors?
Expense
Amount
Rent
$10,800
Insurance
$3,000
Store Fixtures
$2,700
Computer and Cash Register
$1,200
Inventory
$17,400
a.
4.6%
b.
9.5%
c.
45.6%
d.
95.4%
Answer:
4.6 % is the percent of the total set-up and operation expense will have to be funded through loans or investors .
Option (a) is correct .
Step-by-step explanation:
As given
Korey is planning to open a comic book store.
Korey has $8,500 in savings and $25,000 in inheritance money to use to open his store.
Total amount money Korey have = Saving money + Inheritance money
= $8500 + $25000
= $33500
As given
The expenses of Korey for opening a comic book store.
Amount Rent- $10800 ,Insurance - $3000 ,Store Fixtures -$2,700
Computer and Cash Register - $1,200 , Inventory - $17400
Total amount of expenses = Rent amount + Insurance amount + Store Fixtures amount + Computer and Cash Register amount + Inventory amount
Total amount of expenses = $10800 + $3000 + $2700 + $1200 + $17400
= $35100
Thus
Fund taken through loans and investor = Total amount of expenses - Total amount money Korey have
Putting the value in the above
Fund taken through loans and investor = $35100 - $33500
= $1600
Formula
\(Percentage = \frac{Fund\ taken\ through\ loans\ and\ investor\times 100}{Total\ amount\ of\ expenses}\)
\(Percentage = \frac{1600\times 100}{35100}\)
Percentage = 4.6 % (Approx)
Therefore the 4.6 % is the percent of the total set-up and operation expense will have to be funded through loans or investors .
Option (a) is correct .
\(\boxed{4.6\% }\) percent of the total set-up and operation expense will have to be funded through loans or investors. Option (a) is correct.
Further explanation:
Given:
The options are as follows,
(a). \(4.6\%\)
(b). \(9.5\%\)
(c). \(45.6\%\)
(d). \(95.4\%\)
Explanation:
Korey has \(\$ 8500\) in savings.
The inheritance money Korey has is \(\$ 25000.\)
The expense amount of rent is \(\$ 10800.\)
The insurance amount is \(\$ 3000.\)
The amount of store fixture is \(\$ 2700.\)
The expense amount for computer and cash register is \(\$1200.\)
The inventory amount is \(\$ 17400.\)
Total expense can be calculated as follows,
\(\begin{aligned}{\text{Total expense}} &= 10800 + 3000 + 2700 + 1200 + 17400\\&= \$ 35100\\\end{aligned}\)
The total amount of money Korey has can be calculated as follows,
\(\begin{aligned}{\text{Total amount}} &= 25000 + 8500\\&= \$ 33500\\\end{aligned}\)
The amount of loan can be obtained as follows,
\(\begin{aligned}{\text{Loan}} &= {\text{Total expense}} - {\text{Money in hand}}\\{\text{ 35100}}&= - 33500 \\&= \$1600\\\end{aligned}\)
Percentage of the total set-up and operation expense will have to be funded through loans or investors can be obtained as follows,
\(\begin{aligned}{\text{Percentage}} &= \frac{{{\text{loan \times 100}}}}{{{\text{Total expense}}}} \\&=\frac{{1600 \times 100}}{{35100}}\\&= 4.6\% \left( {{\text{approx}}} \right)\\\end{aligned}\)
\(\boxed{4.6\% }\) percent of the total set-up and operation expense will have to be funded through loans or investors. Option (a) is correct.
Option (b) is not correct.
Option (c) is not correct.
Option (d) is not correct.
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Answer details:
Grade: High School
Subject: Mathematics
Chapter: Simple interest
Keywords: Korey, comic book store, store opens, expense, breakdown, inheritance, operation, funded, initial expense, percent of the total set-up, plans, employee, business grows, extend, operations, additional employees, Korey’s business plan, information, financial analysis, organizational plan, executive summary.