Question

Rolf Company pays its employees on a graduated commission scale: 1% on the first $25,000 sales, 3% on sales from $25,001 to $95,000, and 5% on sales greater than $95,000. If John Jones, an employee of Rolf, had sales of $100,000, what commission did John earn?

Answer 1

First $25,000: Commission = 1/100*25000 = $250
$25,001 to $95,000: Commission = 3/100*(95000-25000) = $2,100
Above $95,000: Commission = 5/100*(100000-95000) = $250

Total commission earned = 250+2100+250 = $2,600