A broker charges a graduated commission: 6% on the first $200,000 of the sale price and 4% on the amount above $200,000. If a property sells for $350,000, what is the total commission?
Correct Answer
A) $18,000
Step 1: Commission on first $200,000 = $200,000 × 6% = $12,000. Step 2: Amount above $200,000 = $350,000 − $200,000 = $150,000. Step 3: Commission on remainder = $150,000 × 4% = $6,000. Step 4: Total = $12,000 + $6,000 = $18,000.
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