EXAMPLE 4: Spectrum provides the internet at Charity's apartment. Spectrum used to charge a $6 monthly fee if you rent a modem through their company. Recently, Spectrum increased the monthly
modem fee to $8 per month. Charity decides to purchase a modem so she does not have to pay the
higher rental fee anymore.
Charity searched online for a comparable modem to purchase. She found one at Target that costs
$62.99 plus 8% sales tax. She decides to purchase the modem and will no longer have to pay the
monthly modem rental fee.
How many months will it take for Charity to break-even on her purchase? Think of her 'savings' as
'revenue'
Cost equation:
Revenue equation:
Graphically:
Algebraically:
EXAMPLE 5: The drama club is selling tickets to a play for $10 each. The cost to rent the theater and
costumes is $500. In addition, the printing company charges $0.50 per ticket for printing. How many
tickets must the club sell to make a profit?
Cost equation:
Revenue equation:
Graphically:
Algebraically: