Unit 2, Lesson 3

Commission, Sales Tax, and Profit

Warm UpEstimate.

1. 20% of 602

2. 133 out of 264

3. 151% of 78

4. 0.28 out of 0.95

120

50%

120

30%

Possible answers:

A commission is a fee paid to a person who makes a sale. It is usually a percent of the selling price. This percent is called the commission rate.

commission ratecommission rate salessales = commissioncommission

A real-estate agent is paid a monthly salary of $900 plus commission. Last month he sold one condominium for $65,000, earning a 4% commission on the sale. How much was his commission? What was his total pay last month?

Class Example

First find his commission.

4% $65,000 = c commission rate sales = commission

0.04 65,000 = c Change the percentto a decimal.

2600 = c Solve for c.

Class Example: Continued

He earned a commission of $2600 on the sale.Now find his total pay for last month.

$2600 + $900 = $3500 commission + salary = total pay.

His total pay for last month was $3500.

A real-estate agent is paid a monthly salary of $900 plus commission. Last month he sold one condominium for $65,000, earning a 4% commission on the sale. How much was his commission? What was his total pay last month?

A car sales agent is paid a monthly salary of $700 plus commission. Last month she sold one sports car for $50,000, earning a 5% commission on the sale. How much was her commission? What was her total pay last month?

Practice Problem 1

First find her commission.

5% $50,000 = c commission rate sales = commission

0.05 50,000 = c Change the percent to a decimal.

2500 = c Solve for c.

The agent earned a commission of $2500 on the sale.

Now find her total pay for last month.

$2500 + $700 = $3200 commission + salary = total pay.

Her total pay for last month was $3200.

A car sales agent is paid a monthly salary of $700 plus commission. Last month she sold one sports car for $50,000, earning a 5% commission on the sale. How much was her commission? What was her total pay last month?

Practice Problem 1 (Continued)

Sales tax is the tax on the sale of an item or service. It is a percent of the purchase price and is collected by the seller.

If the sales tax rate is 6.75%, how much tax would Adrian pay if he bought two CDs at $16.99 each and one DVD for $36.29?

Class Example

CD: 2 at $16.99 $33.98

DVD: 1 at $36.29 $36.29

$70.27 Total Price

0.0675 70.27 = 4.743225 Write the tax rate as a decimal and multiply by the total price.

Adrian would pay $4.74 in sales tax.

Practice Problem 2

Amy reserves a hotel room for $45 per night. She stays for two nights and pays a sales tax of 13%. How much tax did she pay?

$45 2 = $90 Find the total price for the hotel stay.

$90 0.13 = $11.70 Write the tax rate as a decimal and multiply by the total price.

Amy spent $11.70 on sales tax.

Anna earns $1500 monthly. Of that, $114.75 is withheld for Social Security and Medicare. What percent of Anna’s earnings are withheld for Social Security and Medicare?

Practice Problem 3

Think: What percent of $1500 is $114.75?

Set up a proportion.114.75 1500

n100

=

n 1500 = 100 114.75 Find the cross products.

1500n = 11,475 Simplify.

Practice Problem 3 Continued

n = 7.65

7.65% of Anna’s earnings is withheld for Social Security and Medicare.

11,475 1500

n =

Simplify.

Divide both sides by 1500

Anna earns $1500 monthly. Of that, $114.75 is withheld for Social Security and Medicare. What percent of Anna’s earnings are withheld for Social Security and Medicare?