Question

Broker list the motel for $1450000. the listing contract specifies a 6.5% commission for the first $600000 of selling price, 7% for the nexy $800000, and 8% commission on all of the actule sale price exceeding $1.4 million. the broker has agreed to a 45-55 split if the property is sold by one of te broker's sale assocites. the property is sold in house. thw broker pays 55% of the total commossion. What is the sales associate's commission if the property is sold?

A) $72,500
B) $100,100
C) $105,000
D) $116,000

Answer 1

The sales associate's commission for selling the motel is $54,450.

Step-by-step explanation:

The sales associate's commission can be calculated by first determining the selling price of the motel. The commission structure specifies different rates for different portions of the selling price. So we need to break down the selling price according to these rates. Let's calculate:

1. 6.5% commission on the first $600,000 = $600,000 * 6.5% = $39,000
2. 7% commission on the next $800,000 = $800,000 * 7% = $56,000
3. 8% commission on the remaining portion exceeding $1.4 million = ($1,450,000 - $1,400,000) * 8% = $4,000

The total commission earned by the broker will be the sum of these three amounts: $39,000 + $56,000 + $4,000 = $99,000. Since the broker has agreed to a 45-55 split, the sales associate's commission will be 55% of the total commission, which is $99,000 * 55% = $54,450. Therefore, the correct answer is $54,450.