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Real-Life Math

You're an independent cartoonist preparing to publish your first comic book.

A few months ago, you sent a couple of copies to a comic book distributor, who liked your work and agreed to advertise it in the catalog of new comics he sends out to national retailers.

The retailers obviously liked your work as well, because the distributor told you he needed 8,000 copies of your comic book!

Now comes the tough part -- finding the money you'll need to get copies of your comic printed by a professional printer and produce promotional posters to advertise your comic book.

You decide to go to get a small business loan from your local bank. Since you've got the order form from the distributor, you should be a pretty safe bet for the loan. But before you go into the loans office, you have to be able to show that you can earn enough money to pay back the bank and pay yourself (10 percent minimum) with the earnings of the comic book sales.

After a visit to the printers, you find out it will cost $480 for the promotional posters and $1,000 to print the comics.

You sell each comic to the retailer for $2.20.

If you account for an interest rate of 4 percent of the amount borrowed over 4 months (the amount of time you need to repay the loan), the distributor's take (25 percent of the sales) and the 10 percent that you need to pay yourself, what is your total profit?

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OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.