A microwave costs $89, with a $17 full-replacement warranty. If the manufacturer sells 475,360 warranties and has to honor 7.5% of them, how much profit did the manufacturer make from the warranties?

Warranty sales brought in 475,360 × $17 = $8,081,120. The manufacturer had to honor 7.5% of the warranties, or 475,360 × 0.075 = 35,652 warranties, costing 35,652 × $89 = $3,173,028. Subtracting the replacement costs from the sales revenue gives $8,081,120 − $3,173,028 = $4,908,092, so the profit was $4,908,092.

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