Question

Megan used to work at the local pizzeria for $15,000 per year but quit in order to start her own deli. To buy the necessary equipment, she withdrew $20,000 from her inheritance, (which paid 8 percent interest). Last year she paid $25,000 for ingredients and $500 per month rent but had revenue of $50,000. She asked her dad the accountant and her mom the economist to calculate her costs for her.
A. Dad says her cost is $9,000 and Mom says her cost is $2,400.
B. Dad says her cost is $31,000 and Mom says her cost is $35,000.
C. Dad says her cost is $25,000 and Mom says her cost is $16,600.
D.Dad says her cost is $31,000 and Mom says her cost is $47,600.

Answer 1

Answer:

D. Dad says her cost is $31,000 and Mom says her cost is $47,600.

Explanation:

As an accountant her dad adds up the price of the ingredients and the rent for a total cost of $31,000. On the other hand her mom, as an economist, adds additionally the cost of leaving the pizzeria ($15,000) and the cost of withdrawing the inheritance which is the interest she would have been paid (8% x $20,000), giving her a total cost of $47,600.