8
QuizMultiple Choice

Variable Earnings

Question 8 • FL-2102373-Personal Finance and Money Management Honors

A graduated commission employee makes 3.5% interest on the first $50,000 in sales and 6.5% interest on all sales over $50,000. Which of the following expressions represents the employee’s total earnings on $81,500 in sales?

Answer
A
(0.035)(50,000) + (0.065)(81,500)
B
(0.035)(50,000) + (0.065)(31,500)
C
(0.35)(50,000) + (0.65)(31,500)
D
(3.5)(50,000) + (6.5)(31,500)

Explanation

The first $50,000 in sales earns 3.5%, so that part is represented by (0.035)(50,000). Sales above $50,000 earn 6.5%; the amount above the threshold is $81,500 − $50,000 = $31,500. Therefore, total earnings are represented by (0.035)(50,000) + (0.065)(31,500), choice B.

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