Compound Interest

Question

You are offered two different sales jobs. The first company offers a straight commission of 6% of the sales. The second company offers a salary of $ 420 per week plus 4% of the sales. How much would you have to sell in a week in order for the straight commission offer to be at least as good?

Answer 1

Hello Richard,

if the variable x represents the sales in a week:

first company offer = .06*x

Second company offer = 420 + .04*x

the question asks for the amount of sales that’d make the straight commission (1st company) offer at least as good as the 2nd, so you set the two offers equal to each other and solve for x:

.06x = 420 + .04x

subtract .04x from both sides: .02x = 420

from there you should be able to solve for x. You got this!