How much total commission would be owed on a property sold for $150,000 with a tiered commission rate of 6% on the first $50,000 and 5% on the remainder?

How much total commission would be owed on a property sold for $150,000 with a tiered commission rate of 6% on the first $50,000 and 5% on the remainder?

• A. $7,500
• B. $8,000
• C. $8,500
• D. $9,000

Answer: (B)

To calculate the total commission owed on the property sold for $150,000 with a tiered commission structure, we first need to break the sale price down into the portions that are subject to different commission rates. The first tier is the first $50,000, which is subject to a commission rate of 6%. To find the commission on this portion, we multiply: First tier commission: $50,000 * 6% = $3,000 Next, we look at the remainder of the sale price, which is $150,000 - $50,000 = $100,000. This portion is subject to a commission rate of 5%. We calculate that commission as follows: Second tier commission: $100,000 * 5% = $5,000 Now, to find the total commission, we combine the commissions from both tiers: Total commission: $3,000 (first tier) + $5,000 (second tier) = $8,000 Thus, the total commission owed on the property sale would be $8,000, making this the correct answer. This tiered commission structure is essential in real estate transactions as it incentivizes agents by providing higher percentages on initial values

To calculate the total commission owed on the property sold for $150,000 with a tiered commission structure, we first need to break the sale price down into the portions that are subject to different commission rates.

The first tier is the first $50,000, which is subject to a commission rate of 6%. To find the commission on this portion, we multiply:

First tier commission:

$50,000 * 6% = $3,000

Next, we look at the remainder of the sale price, which is $150,000 - $50,000 = $100,000. This portion is subject to a commission rate of 5%. We calculate that commission as follows:

Second tier commission:

$100,000 * 5% = $5,000

Now, to find the total commission, we combine the commissions from both tiers:

Total commission:

$3,000 (first tier) + $5,000 (second tier) = $8,000

Thus, the total commission owed on the property sale would be $8,000, making this the correct answer. This tiered commission structure is essential in real estate transactions as it incentivizes agents by providing higher percentages on initial values