Real-Life Math
You are employed as an industry liaison officer at a university. For the past 2 years, a technology business has been funding research on a certain technology. This technology will be incorporated into computer sound cards to improve the sound that users can hear on their home computers.
Now the research is complete and the technology is ready to be used. Under the terms of your agreement with the company, the company is entitled to license the technology. That means they have the right to incorporate it in their sound cards.
However, they must pay the university a sum of money every time they use the technology. This sum is called a "royalty."
The royalties are set at 5 percent of the net profit. Net profit means the amount that the business will have after they deduct their expenses related to using the technology. Therefore, the royalty will be 5 percent of the sales price after expenses are removed.
You are to receive a royalty check quarterly (every 3 months).
Within the first 3 months, the company sells 34,586 sound cards with your technology incorporated. The sound cards sell for $289.98. It costs the company $19.59 per sound card to incorporate your technology.
What is the amount of the check you receive at the end of the first quarter?