trevor has just finished writing a deeply profound book titled, the longer i live, the older i get. the publisher has given him two options: receiving $20,000 up front and 8% of the sales of the book or $50,000 up front and 5% of the sales of the book. What do the sales have to be for trevor to make the same amount for each option

Answer 1

Let's denote the total sales of the book as S.

For the first option, Trevor will receive $20,000 up front and 8% of the sales, which is 0.08S.

Total earnings for the first option = $20,000 + 0.08S

For the second option, Trevor will receive $50,000 up front and 5% of the sales, which is 0.05S.

Total earnings for the second option = $50,000 + 0.05S

To find the point where Trevor makes the same amount for each option, we set the two total earnings equal to each other:

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

0.03S = $30,000

S = $30,000 / 0.03

S = $1,000,000

Therefore, the sales have to be $1,000,000 for Trevor to make the same amount for either option.