A professional photographer who specializes in wedding-related activities paid $48,000 for equip­ment that will have a $2000 salvage value after 5 years. He estimates that his costs associated with each event amount to $65 per day. If he charges $300 per day for his services, how many days per year must he be employed in order to break even at an interest rate of 8% per year?

What will be an ideal response?


Let x = days per year to breakeven
0 = -48,000(A/P,8%,5) + 2000(A/F,8%,5) – 65x + 300x
0 = -48,000(0.25046) + 2000(0.17046) – 65x + 300x
235x = 11,681.16
x = 49.7 days/year

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