Name: Jay B.
Who is asking: Student
Salary Plan 2: No base pay but a 6% commission on each sale.
I can`t seem to figure out how to approach this problem. I thought about graphing it as a function, but can`t seem to figure out how. I`M LOST! PLEASE HELP! This is due February 23, 2001, I would appreciate your prompt response. Thank you very much. -JayHi Jay,
Graphing is not a bad idea. First I looked at some numbers. Suppose that he sold $100 000 worth of real-estate in one month. How much would he make?
Salary Plan 2: He would receive 6% of $100 000 or $6000
Suppose he sold $50 000 worth of real-estate. How much would he make?
Salary Plan 2: He would receive 6% of $50 000 or $3000
The question to ask is "How much real-estate sold would result in salary plans 1 and 2 giving the same result?" If he sells $x then salary plan 1 results in $2000 plus 3% of $x and salary plan 2 results in 6% of $x. Thus find x if $2000 plus 3% of $x equals 6% of $x.Cheers,
Here is a second answer from Leeanne
You were on the right track with your idea about graphing, but you would need to graph 2 functions not just one. Set up a coordinate plane with your x-axis being monthly sales and the y-axis being monthly salary. Now if you graph each of the functions that represent each of the salary options available (hint: use a different colour for each line, say red abnd blue) you should be able to divide the graph into two sections: (1) the part where the red line is above the blue line - for these x-values (monthly sales amounts) the salary option representing the red line is better. (2) the part where the blue line is above the red line - the salary option representing the blue line is better.
At the point where the two lines cross, there is no difference between the two salary options.
There is also a way to solve this problem with only algebra. Suppose we want to find out the monthly sales figure the employee has to reach in order for the 6% commission option to be the better option. If we let x be the unknown monthly sales figure, the we need to solve the following inequality for x:
6% of x is greater than 2000 plus 3% of x
The answer to this inequality will tell you range or interval of monthly sales figures that will yield a higher salary under the option of taking only 6% commission.
Hope this helps,