Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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**Problem 5: Salary Calculation for Sales**

Evelyn Watterson sells cosmetics for Final Touch, Inc. She is guaranteed a salary of $650 a month or 7% of her total sales, whichever is greater. What is her gross pay for a month in which her total sales were $9,654?

**Solution:**

1. Calculate 7% of her total sales:
   - \(0.07 \times 9,654 = 675.78\)

2. Compare the two amounts:
   - Guaranteed salary = $650
   - 7% of sales = $675.78

3. Determine whichever amount is greater:
   - Evelyn's gross pay for the month will be $675.78 since 7% of her sales is greater than the guaranteed salary.

**Conclusion:**

Evelyn Watterson will receive a gross pay of $675.78 for the month.
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Transcribed Image Text:**Problem 5: Salary Calculation for Sales** Evelyn Watterson sells cosmetics for Final Touch, Inc. She is guaranteed a salary of $650 a month or 7% of her total sales, whichever is greater. What is her gross pay for a month in which her total sales were $9,654? **Solution:** 1. Calculate 7% of her total sales: - \(0.07 \times 9,654 = 675.78\) 2. Compare the two amounts: - Guaranteed salary = $650 - 7% of sales = $675.78 3. Determine whichever amount is greater: - Evelyn's gross pay for the month will be $675.78 since 7% of her sales is greater than the guaranteed salary. **Conclusion:** Evelyn Watterson will receive a gross pay of $675.78 for the month.
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