Expert: Pawan Musale - 5/29/2009

Question
Ken left a job paying $75,000 per year to accept a sales job paying $45,000 per year plus 15 percent commission.If each of his sales is for $750, what is the least number of sales he must make per year if he is not to lose money because of the change?

Answer
Shruti,

First of I apologize for delayed response. My response is:

Ken has a difference of $30,000 in his new job. He has to fill out this so as to come back to the original level.

Now he gets 15% commission for each job. His one job is for $750. Means he gets (750 * 0.15) = $114.75 for each job.

So now put this in table like below: (For one job, he earns (750 * 0.15), so 'x' jobs are required to earn 30,000)

                 No of jobs             Amount earned
                     1                   750*0.15
                     x                    30,000

Cross multiply,

1*30,000 = (750*0.15)*x

Solving this,

x = 30,000 / (750 * 0.15)

On solving,

x = 266.67

Now jobs can be integer, it cannot be 266.67. So he has to complete at least 267 jobs so that he will earn amount equal to that of his last job.

I hope this is clear.

Regards,
Pawan