The Musical Instrument Store estimates costs of $18,750.00 annually to carry inventory of musical instruments and accessories. The costs include 12% for storage, 12% for interest, and 5% for transportation. What is the value of the inventory to the nearest cent?

Question

mathstudent55 · Answer

The cost of the inventory is 100% of $18,750,000.
With storage, interest, and transportation amounting to 12% + 12% + 5%, or 29%, of the cost, that means the value of the inventory is only 100% - 29% = 71% of $18,750,000.
The value is 71% of $18,750,000.