Nitin is paid on a graduated commission scale. His base salary is $1,500 per month and he receives commission at the rate of 2% for the first $10,000 of sales in a month, 3% on the next $20,000, and 4.5% on all further sales. How much will Nitin earn in a month in which his sales are $60,000?
A) $2,150
B) $2,250
C) $3,750
D) $3,650
E) $2,500

Question

Quizplus · Accepted Answer

Nitin's earnings can be calculated as follows: Base salary = $1,500. For the first $10,000 of sales, commission = 2% of $10,000 = $200. For the next $20,000 of sales, commission = 3% of $20,000 = $600. For the remaining $30,000 of sales (since $60,000 - $10,000 - $20,000 = $30,000), commission = 4.5% of $30,000 = $1,350. Total earnings = $1,500 (base salary) + $200 + $600 + $1,350 = $3,650.

Nitin Is Paid on a Graduated Commission Scale