Expert: Pawan Musale - 4/2/2009

Question
Sam Seller told Betty Broker that he needed to net $120,000 on the sale of his home. If he pays her a 5% commission, what does the property need to sell for? Use whole numbers.

Answer
Hi,

This is pretty simple.
Sam pays 5% commission to Betty. This means that he has to pay her $5 for each $100. OK? So we will find out how much does he need to pay her for $120,000.

Now write this in a table like this:

              Amount      Commission
                100            5
              120,000           x

To solve this, always use cross multiplication like this:

100 * x = 5 * 120,000

Solving for x,

x = 6000

This means that Sam needs to pay $6000 to Betty. So he must add this much value in his sell value.

Final sell value = 120,000+6000 = 126,000

So Sam needs to sell his property for $126,000 so that he will get net $120,000 in hand.

I hope this is clear.

Regards,
Pawan