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

Question

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

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

pushpitkc · Answer

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.

luffy_ueki · Answer

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

GMATGuruNY · Answer

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

E: 7000, implying $2000 profit in excess of $5000 
Additional earnings for John = 20% of $2000 = 400. 
Success!

adstudy · Answer

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

JeffTargetTestPrep · Answer

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

800Dreamer · Answer

Many of you might be thinking that for Ed we need to check 2 cases. One less than and one greater than 8000.
But no.
See carefully the options. None is >8000.
So case 2 gone.
Only case is left ---> 0.2∗(x−5000)+600=1000

x=7000.

Solved in a minute.

bumpbot · Answer

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

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