If Rope Inc.receives $23,825 from credit card collections and has an average rate of 4.7% charged by the credit card company,its credit card sales during the period were
A)$111,978.
B)$50,691.
C)$25,000.
D)$22,705.

Question

Quizplus · Accepted Answer

The amount received from credit card collections is after the credit card company has taken its fee. To find the original sales amount, you divide the amount received by (1 - the rate charged). So, $23,825 / (1 - 0.047) = $23,825 / 0.953 = $25,000.