A Home Improvement Salesperson earns a $12,000 commission on a $150,000 kitchen remodel contract. What is the commission rate percentage?
Correct Answer
D) 8.0%
Commission rate = ($12,000 ÷ $150,000) × 100 = 8.0%. This calculation determines the percentage commission earned on the contract value.
Why This Is the Correct Answer
Commission rate = (Commission ÷ Contract Amount) × 100 = ($12,000 ÷ $150,000) × 100 = 8.0%. This is a straightforward percentage calculation: 12 divided by 150 = 0.08, multiplied by 100 = 8%.
Why the Other Options Are Wrong
Option A: 7.2%
7.2% is incorrect. This would result from dividing incorrectly or using the wrong base figure. $150,000 × 0.072 = $10,800, not $12,000.
Option B: 8.5%
8.5% is incorrect. $150,000 × 0.085 = $12,750, not $12,000. This is slightly higher than the actual commission earned.
Option C: 6.5%
6.5% is incorrect. $150,000 × 0.065 = $9,750, not $12,000. This percentage understates the commission rate.
Memory Technique
Commission % = (Part ÷ Whole) × 100. The commission is the 'part' and the contract is the 'whole.' $12,000 is 12 out of 150 thousands = 12/150 = 2/25 = 8/100 = 8%.
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