Question

McKenzie sells houses. He is paid a commission of 2

percent of his first $50,000 in sales during the month, 2.5
percent on the next $100,000 and 3 percent on all sales
over $150,000. What is his commission on $200,150
worth of sales?

Answer 1

$5004.50

Explanation:

The most straightforward computation is as follows:

on the first $50,000: 0.02×50,000 = 1,000

on the next $100,000: .025×100,000 = 2,500

on the next 200,150 -150,000 = 50,150: 0.03×50,150 = 1504.50

So, the total commission is ...

$1000 +2500 +1504.50 = $5004.50

McKenzie gets a commission of $5,004.50 on $200,150 worth of sales.

_____

Alternate method

The commission function can also be described as ...

2% for sales of $50,000 or less

2.5% less $250 for sales of $150,000 or less

3% less $1000 for sales of $150,000 or more

Using this formulation, the commission on $200,150 is ...

0.03×$200,150 -1,000 = $6004.50 -1000 = $5004.50 . . . . same as above