Question

A broker's office policy is that the sales associate's share of a commission is 65%. What is the sales associate's compensation if the sales price of a property is $195,000 and the broker is entitled to a 5.5% commission?

A)
$697.13
B)
$8,872.50
C)
$6,971.25
D)
$69,712.50

Answer 1

To calculate the sales associate's compensation, multiply the property's sales price by the broker's commission rate to find the total commission, then multiply by the associate's share percentage. The sales associate's compensation for a $195,000 property with a 5.5% commission and a 65% share is $6,971.25.

Step-by-step explanation:

To calculate the sales associate's compensation from the sale of the property, we need to find the total commission earned by the broker and then take the sales associate's share of that commission. The sales price of the property is $195,000, and the broker's commission rate is 5.5%. Here are the steps to find the sales associate's compensation:

1. Convert the commission rate from a percentage to a decimal by dividing by 100: 5.5% / 100 = 0.055.
2. Multiply the sales price by the commission rate to find the total commission: $195,000 x 0.055 = $10,725.
3. Calculate the sales associate's share by multiplying the total commission by the sales associate's share percentage: $10,725 x 0.65 = $6,971.25.

The sales associate's compensation would be $6,971.25, so the correct answer is Option C.