An entrepreneur is considering how many limousines to purchase when he starts up a limousine service. Below are his estimates of the number of limousine rentals the service will make during a year, depending on the number of limousines available.
|
Number of limousines
|
Total number of rentals
|
|
1
|
350
|
|
2
|
650
|
|
3
|
900
|
|
4
|
1100
|
|
5
|
1250
|
After paying all non-interest expenses, the owner expects to net $10 per rental. Each limousine costs $50 000. How many limousines should he purchase if the real interest rate is 4.5%?