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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

selling price = $600/0.95 = $631.58.

I hope this helps,
Penny







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