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John and Ed work for the same Sales Company. John receives a $600 basi

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John and Ed work for the same Sales Company. John receives a $600 basi  [#permalink]

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New post 08 Jan 2018, 23:45
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  65% (hard)

Question Stats:

56% (02:16) correct 44% (02:37) wrong based on 43 sessions

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John and Ed work for the same Sales Company. John receives a $600 basic salary plus 20 percent of any profit he realizes for the company in excess of $5,000, while Ed receives an $800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than $8,000, otherwise he receives a flat salary of $1,000. For what amount of profit will both John and Ed earn the same amount?

A. $1,000
B. $1,200
C. $2,400
D. $6,000
E. $7,000

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John and Ed work for the same Sales Company. John receives a $600 basi  [#permalink]

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New post 09 Jan 2018, 01:11
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Bunuel wrote:
John and Ed work for the same Sales Company. John receives a $600 basic salary plus 20 percent of any profit he realizes for the company in excess of $5,000, while Ed receives an $800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than $8,000, otherwise he receives a flat salary of $1,000. For what amount of profit will both John and Ed earn the same amount?

A. $1,000
B. $1,200
C. $2,400
D. $6,000
E. $7,000


John's salary is 600$ + 20% of the profit from sales > $5000
Ed's salary is 800$ + 40% of the profit from sales > $8000 (Else, he receives a flat salary of $1000)

Since the basic salary of John is 600$ and he receives 20% over 5000$ in profit,
in order to make the earnings equal, \(0.2*(x-5000) + 600 = 1000\)
The reason Ed's earning will not be greater than the flat rate of $1000 is
because Ed earns 40% of the sales, whereas John earns only 20% of the sales


Simplifying this further, we get \(0.2*(x-5000) = 400\) -> \(x-5000 = 2000\) -> \(x = 7000\)

Therefore, at 7000(Option E) as the common profit, John and Ed earn the same amount.
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Re: John and Ed work for the same Sales Company. John receives a $600 basi  [#permalink]

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New post 09 Jan 2018, 21:18
Based on the problem stmt:
J = 600 + 20%(P-5000) where P is the profit, and J is the salary recieved by John

E = 800 + 40% of P (if P >8000)
else E=1000

lets see if for any value of P we can have J = E .. on solving we get P=7000
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Re: John and Ed work for the same Sales Company. John receives a $600 basi  [#permalink]

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New post 26 Jul 2018, 03:18
Bunuel wrote:
John and Ed work for the same Sales Company. John receives a $600 basic salary plus 20 percent of any profit he realizes for the company in excess of $5,000, while Ed receives an $800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than $8,000, otherwise he receives a flat salary of $1,000. For what amount of profit will both John and Ed earn the same amount?

A. $1,000
B. $1,200
C. $2,400
D. $6,000
E. $7,000


We can PLUG IN THE ANSWERS, which represent the amount of profit.

Since Ed earns a flat salary of $1000 if the amount of profit does not exceed $8000 -- and all of the answer choices are less than 8000 -- Ed's earnings = $1000.
Since John and Ed must earn the same amount, John must also earn $1000.

John earns a $600 base salary plus 20% of any profit in excess of $5000.
Thus, for John to earn $1000, the correct answer must be greater than 5000.
Eliminate A, B and C.
When the correct answer is plugged in, the amount of profit in excess of $5000 will yield John an additional $400 on top of his $600 base salary, bringing his total earnings to $1000.

D: 6000, implying $1000 profit in excess of $5000
Additional earnings for John = 20% of $1000 = 200.
Too small.
Eliminate D.



E: 7000, implying $2000 profit in excess of $5000
Additional earnings for John = 20% of $2000 = 400.
Success!
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Re: John and Ed work for the same Sales Company. John receives a $600 basi  [#permalink]

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New post 26 Jul 2018, 03:49
Bunuel wrote:
John and Ed work for the same Sales Company. John receives a $600 basic salary plus 20 percent of any profit he realizes for the company in excess of $5,000, while Ed receives an $800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than $8,000, otherwise he receives a flat salary of $1,000. For what amount of profit will both John and Ed earn the same amount?

A. $1,000
B. $1,200
C. $2,400
D. $6,000
E. $7,000


According to question -

John's earning => 600 + 20% (P - 5000) ------ (1)
where P is the amount company earned

Ed's earning => 800 + 40% (P)
where P is the amount company earned
----------------------------
Now if P < 8000 then
Ed's earning => 1000 ------ (2)

if P>8000
Ed's earning => 800 + 40% (Q) ------ (3)

Now question says for what profit (P) will they earn the same amount i.e John's earning = Ed's earning

Now if we look at the options, we see that P is less than 8000, therefore Ed's earning will be 1000 (From (2))

Therefore using (1) and (2)

600 + 20% (P - 5000) = 1000

On solving this we get P = 7000

Hence E

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Re: John and Ed work for the same Sales Company. John receives a $600 basi  [#permalink]

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New post 30 Jul 2018, 11:48
Bunuel wrote:
John and Ed work for the same Sales Company. John receives a $600 basic salary plus 20 percent of any profit he realizes for the company in excess of $5,000, while Ed receives an $800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than $8,000, otherwise he receives a flat salary of $1,000. For what amount of profit will both John and Ed earn the same amount?

A. $1,000
B. $1,200
C. $2,400
D. $6,000
E. $7,000


Notice that Ed earns a higher basic salary and a higher percentage of the profit (if the profit is over $8000) than John. Therefore, there is no way John will earn the same amount as Ed unless the profit is not over $8000. In that case, Ed will only receive a flat salary of $1,000. Therefore, we can create the equation:

600 + 0.2(P - 5000) = 1000

0.2P - 1000 = 400

0.2P = 1400

P = 1400/0.2 = 14000/2 = 7000

Answer: E
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Re: John and Ed work for the same Sales Company. John receives a $600 basi &nbs [#permalink] 30 Jul 2018, 11:48
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