Question

Mike is a salesperson in a retail carpet store. He is paid $500 base salary per month plus 5% commission on sales over $10,000. His sales this month were $23,750. His total deductions were $152.75. What is Mike’s net pay?

Answer 1

$1034.75

Explanation:

Here we are given that the base salary of Mike is $500. He is also rewarded with some commission depending on sales. Hence we can bifurcate his gross pay as

Gross Pay = Base Pay + Commission

Commission = 5% of Sales over $10000

= 5% of (23750-10000)

= 5% of 13750

= 0.05*13750

= 687.50

Hence Gross pay = 500 + 687.50

= 1187.50

Also given that he has some deductions also i.e. $152.75 .

Therefor Net pay = Gross pay - Deductions

= 1187.50-152.75

= 1034.75

Hence Net Pay = $1034.75

Answer 2

$1034.75

Explanation:

Mike's net pay is ...

base pay + commission - deductions

= $500 + 5%(23750 -10000) -152.75

= 347.25 + 0.05×13750

= $1034.75