Real-Life Math
You are an advertising production manager at a small monthly publication.
As part of your job, you follow up with your advertisers. You want to generate
revenue for the magazine from selling ad space.
You've been trying
to get a new advertiser on board with your magazine. You know that the client's
yearly budget for advertising is about to become available. You want to lock
down as much of that ad money as you can. You want to prepare some numbers
to improve your sales pitch. Your aim is to sell the client prime ad space.
You
decide to use the back cover as an example. Advertising on the back cover
for one month will cost $2,000 (plus five percent tax). However, you are able
to offer significant savings if the client can commit to one year. One year
on the back cover costs $6,000 (plus five percent tax).
"The more
[months] they take on, the more the price comes down," says Paul Ellis. He
works in the advertising department of a fashion magazine.
How much
is the monthly total including tax?
How much is one year including
tax?
If the client commits to one year instead of one month, how much
will they save each month?
What percentage of savings is that?