A toaster oven costing $130 offers an extended warranty for 25% of the purchase price. If the local repair shop will fix a toaster oven for $8, how many times must the toaster oven break in order for the warranty to pay for itself?

The warranty costs 25% of $130, which is $32.50. At $8 per repair, four repairs cost $32, just under the warranty price; five repairs cost $40. So the toaster oven must break five times for the warranty to pay for itself.

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