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 Question from TAHIR: I want to pre-determine the amount of commission on sale of my product which will be the amount that I shall have to pay . For example, the price is $600and commission 5% . 1) I calculate commission on 600 @ 5% =$ 30 When added $600 the retail price =$ 630 2) But on $630, 5% commission =$ 31.50 So we make a loss of $1.50 . 3) Again if we add this$ 1.50 to $630 the price = 631.50 But the commission when calculated does not tally and we make a loss of$ 0.075. Please let me know how to determine the commission beforehand so that it matches our accounts.

Tahir,

If you want to clear $600 but you have to pay a 5% commission then the commission is 5% of the selling price so your$600 is 95% of the selling price. That is

0.95 × selling price = $600 so selling price =$600/0.95 = \$631.58.

I hope this helps,
Penny

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