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A certain realtor earns a 6 percent commission on any home

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A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 14 May 2017, 01:06
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C
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A certain realtor earns a 6 percent commission on any home that he sells, and he must pay 20 percent of the that commission in taxes. If the realtor sells a home for $750,000, how much commission does he earn after taxes?

A) $9,000
B) $18,000
C) $36,000
D) $37,500
E) $45,000
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A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 14 May 2017, 01:24
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A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 14 May 2017, 03:33
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A certain realtor earns a 6 percent commission on any home that he sells, and he must pay 20 percent of the that commission in taxes. If the realtor sells a home for $750,000, how much commission does he earn after taxes?


Realtor sells home for $750,000
Earns 6% commission = 6% of 750,000 = \(\frac{6}{100}\) x 750000 = 45000
Taxes on commission is 20% = 20% of 45000 = \(\frac{20}{100}\) x 45000 = 9000
Therefore commission he earns after taxes = 45000 - 9000 = $36000 ............. Answer C ....

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Re: A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 14 May 2017, 10:18
Vyshak wrote:
A certain realtor earns a 6 percent commission on any home that he sells, and he must pay 20 percent of the that commission in taxes. If the realtor sells a home for $750,000, how much commission does he earn after taxes?

A) $9,000
B) $18,000
C) $36,000
D) $37,500
E) $45,000

$75000*.06*.8= $36000
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Re: A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 14 May 2017, 10:29
He gets 6% of the sale.
750k*.06=45k

Then it asks for 20% of the commission not the sale.

45k*.20=9k

Answer is A.9,000



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Re: A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 14 May 2017, 10:37
Eric8923 wrote:
He gets 6% of the sale.
750k*.06=45k

Then it asks for 20% of the commission not the sale.

45k*.20=9k

Answer is A.9,000



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The correct answer is C, not A as explained above (you can check correct answer under the spoiler in the original post). For example, here: https://gmatclub.com/forum/a-certain-re ... l#p1851677

The point is that he pays 20% tax, so he's left with 80% of 45,000.

Hope it's clear.
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Re: A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 14 May 2017, 11:30
Thanks. Have to make sure I'm careful with the wording. I answered thinking it was asking how much did he pay in taxes.

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Re: A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 18 May 2017, 20:03
Vyshak wrote:
A certain realtor earns a 6 percent commission on any home that he sells, and he must pay 20 percent of the that commission in taxes. If the realtor sells a home for $750,000, how much commission does he earn after taxes?

A) $9,000
B) $18,000
C) $36,000
D) $37,500
E) $45,000


Since the realtor has to pay 20 percent of the commission in taxes, he makes 80% of the 6 percent of $750,000; thus, the commission earned after taxes is:

(750,000)(0.06)(0.8) = 36,000 dollars

Answer: C
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Re: A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 05 Jun 2017, 11:46
Vyshak wrote:
A certain realtor earns a 6 percent commission on any home that he sells, and he must pay 20 percent of the that commission in taxes. If the realtor sells a home for $750,000, how much commission does he earn after taxes?

A) $9,000
B) $18,000
C) $36,000
D) $37,500
E) $45,000


We can solve this question simply by translating the stimulus (question stem) into an algebraic expression

x(.06)(.80)
75,000(.06)(.80)

= 36,000

Why does this work? In order to find the percentage of a given number we simply multiply the given number by a decimal conversion of the given percentage (e.g to find 5 percent of 100 we multiply 100 by .05). So when we multiply x by .06 we have the amount of commission that the realtor earns before taxes. If the realtor has to pay 20 percent of taxes, or in other words has to give away 20 percent of his commission, his profit or rather what he has left is simply 80 percent of his commission.
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Re: A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 02 Dec 2019, 15:23
Hi All,

We're told that a certain realtor earns a 6 percent commission on any home that he sells - and he must pay 20 percent of that commission in taxes. If the realtor sells a home for $750,000, we're asked how much commission he earns AFTER taxes. This question gives us all of the 'numbers' that we need to perform a calculation, so you should look to perform the calculation in whichever 'format' is easiest for you.

6% of $750,000 = (.06)($750,000)

Since 1% of $750,000 = $7,500, you might find it easiest to just multiply $7,500 by 6.... this equals $45,000

20% of $45,000 = (1/5)($45,000) = $9,000

Thus, the commission AFTER taxes is $45,000 - $9,000 = $36,000

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Re: A certain realtor earns a 6 percent commission on any home  [#permalink]

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New post 12 Jan 2020, 06:30
Vyshak wrote:
A certain realtor earns a 6 percent commission on any home that he sells, and he must pay 20 percent of the that commission in taxes. If the realtor sells a home for $750,000, how much commission does he earn after taxes?

A) $9,000
B) $18,000
C) $36,000
D) $37,500
E) $45,000



The commission earned after taxes is:

750,000 x 0.06 x 0.8

750,000 x 6/100 x 8/10 = 750 x 6 x 8 = 36,000.

Answer: C


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Re: A certain realtor earns a 6 percent commission on any home   [#permalink] 12 Jan 2020, 06:30
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