Question

Jones Co. pays its employees on a graduated commission scale: 2% on first $30,000; 3% on sales from $30,000 to $60,000; and 5% on sales greater than $60,000. If Rick Wise, an employee of Jones, had sales of $92,000, what commission did he earn?

Answer 1

We need to separate his total earnings out into the different categories:

Category 1 (2%): 30,000
Category 2 (3%): 60,000-30,000 = 30,000
Category 3 (5%): 92,000-60,000 = 32,000

To calculate a percentage we multiply by that percentage divided by 100.
Now we can work out the commissions:
1) 30,000*0.02 = $600
2) 30,000*0.03 = $900
3) 32,000*0.05 = $1600

Adding these together, we get $3100