If I receive an additional $300 from my parents to put toward my business and have to give them 10% of my earnings above $600, the most money I can hope to earn is $600 + $300 + 0.9 * ($600 - $300).
This simplifies to $900 + 0.9 * $300, which equals $900 + $270 = $1170.
Therefore, the most money I can hope to earn from my business now is $1170.
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.
If you still sell your item for the same price, what is the most money you can hope to earn from your business now?
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