Question

Stella has been offered two options for a new sales job. Option 1 has a base salary of $1200 per month and 2% commission on all sales. Option 2 has a base salary of $800 per month and 3% commission on all sales. Find what sales amount would result in the same amount of pay per month. Show all work. Create two equations assigning variables and setting them equal to each other to answer this question.

Answer 1

$40,000

Explanation:

Let p represent Stella's pay on s amount of sales. Her two pay options are ...

• p = 1200 + .02s
• p = 800 +.03s

Setting the two values of p equal, we have ...

1200 +.02s = 800 +.03s

400 = .01s . . . . . subtract 800+.02s

40,000 = s . . . . . multiply by 100

A sales amount of $40,000 would result in the same pay per month.

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You will note that this amount is the difference in base pay (400) divided by the difference in commission rate (0.01). Once you realize that, no equations are needed.