Question

On the sale of any property, a sales associate's compensation is based on the total commission paid to the broker. The sales associate receives 30% of the first $2,500, 40% of the next amount between $2,500 and $7,500, and 50% of any remaining amount exceeding $7,500. If a property sells for $234,500 and the broker's commission rate is 6.5%, what is the sales associate's total compensation?

Answer 1

Answer:

$6,621.25

Explanation:

Calculation to determine the sales associate's total compensation

First step is to calculate the Total commission to the firm:

Total commission= $234,500 × 6.5%

Total commission = $15,242.50.

Second step is to calculate the three parts of the salesperson's commission

First part

Salesperson's commission=$2,500*30%

Salesperson's commission=$750

Second part

Salesperson's commission=$5,000*40%

Salesperson's commission=$2,000

Third part

Salesperson's commission =$2,500 + $5,000

Salesperson's commission=$7,500

Third step is to calculate the agent 50% commission that is left

Agent commission=($15,242.50 - $7,500) *50%

Agent commission=$7,742.50 * 50%

Agent commission = $3,871.25

Now let determine the sales associate's total compensation

Sales associate's total compensation= $750 + $2,000 + $3,871.25

Sales associate's total compensation= $6,621.25

Therefore Sales associate's total compensation is $6,621.25