Question

Each sales associate at an electronics store has a choice of the two salary options shown below. • $115 per week plus 9.5% commission on the associate’s total sales • $450 per week with no commission The average of the total sales amount for each associate last year was $125,000. Based on this average, what is the difference between the two salary options each year? (52 weeks = 1 year)

Answer 1

Salary option 1
salary: $115×52 weeks=$5980
commission: $125,000×0.095=$11,875
total: $5980+$11,875=$17,855

Salary option 2
salary: $450×52 weeks=$23,400

Difference
$23,400-$17,855
=$5545