Question

This is a real estate math question. On the sale of any property, a sales associates 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 associates total compensation?

Select one:

a. $7,621.25

b. $6,621.25

c. $5,847.00

d. $6,871.25

Answer 1

Answer: Option (b) $ 6,621.25

Computation of Total Commission paid to Broker

Property Sale Value = $ 234,500

Broker's Commission Rate = 6.5%

Total Broker's Commission = $ 234,500 * 6.5%

Total Broker's Commission = $ 15,242.5

Computation of Sales Associate Compensation
	Percent	Computation	Amount
On first $ 2,500	30%	= ($ 2,500 * 30%)	$      750.00
On Next amount between $ 2,500 to $ 7,500	40%	= ($ 7,500 - $ 2,500)* 40%	$ 2,000.00
On Remaning Amount exceeding $ 7,500	50%	= ($ 15,242.5 - $ 7,500)*50%	$ 3,871.25
Sales Associate Compensation			$ 6,621.25

Option : (b)