Question

A property sells for $945,000. The two real estate agents who sold the house agreed to split the commission 75/25. If the agents were paid $113,400 and $37,800 what was the commission rate?

(Sale Price x Commission Rate = Commission)

Answer 1

To find the commission rate, add the amounts paid to the two real estate agents to get the total commission of $151,200. Divide this by the sale price of $945,000 to get a commission rate of 16%.

Step-by-step explanation:

The student asked how to determine the commission rate given the sale price of a property and the amounts paid to two real estate agents who split the commission 75/25. The sale price of the property in question is $945,000. The total commission paid out to the agents is the sum of the two amounts: $113,400 (paid to the first agent) and $37,800 (paid to the second agent), which equals $151,200.

To find the commission rate, we use the formula provided: Sale Price x Commission Rate = Commission. From this, we can deduce the commission rate by dividing the total commission by the sale price.

So, the calculation would be:

Commission Rate = Commission / Sale Price

Commission Rate = $151,200 / $945,000

Commission Rate = 0.16 or 16%

Therefore, the commission rate is 16%.