How much income will he receive from this transaction?

Question

For every insurance policy Mr. Lorenzo sold, he receives 20% of the first payment of his customer, and 8.5% of the second and third payments. If the annual payment on a transacted policy is $124,000, how much income will he receive from this transaction?

Answer 1

Hi Lisalde,

 

There really isn't enough information given because it doesn't really state how many payments Mr. Lorenzo will receive.

 

It sets up what he receives for three payments so we can deteremine what he gets for those three.

 

(.20)(124,000) + (.085)(124,000) + (.085)(124,000)

 

24,800 + 10,540 + 10,540 

 

45,880