An electric guitar costs $830, with a $225 full-replacement warranty. if the manufacturer sells 532,475 warranties and has to honor 12% of them, how much profit did the manufacturer gain from the warranties?

1. Count 12% of 532,475:

532,475 - 100%

x - 12%

Use proportion to find x:

This means that 63,897 electric guitars were sold with full-replacement warranty and 532,475-63,897=468,578 electric guitars were sold without full-replacement warranty.

2. If the manufacturer sells 468,578 electric guitars without full-replacement warranty, then he gain profit

$225·468,578=$105,430,050

from the warranties.

$105,430,050