197
QuizMultiple Choice

Home Ownership — Cumulative exam

Question 197 • Financial Math - MA2007

The table below shows the earnings, in thousands of dollars, for three different commissioned employees. $2,000 + 3% on all sales7% on all sales5% on the first $40,000 + 8% on anything over $40,000December4.45.65.2January3.53.853.6February4.74.94.4Who had the largest dollar amount in sales for the month of January?

Answer
A
The salary plus commission employee.
B
The straight commission employee.
C
The graduated commission employee.
D
They each had the same dollar amount in sales.

Explanation

For January, the salary-plus-commission employee earned $3,500, including a $2,000 salary, so sales were ($3,500 − $2,000) ÷ 0.03 = $50,000. The straight-commission employee’s sales were $3,850 ÷ 0.07 = $55,000. The graduated-commission employee earned $2,000 on the first $40,000 in sales, leaving $1,600 earned at 8%; that means $20,000 in additional sales, or $60,000 total. Therefore, the graduated-commission employee had the largest sales amount.

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