As a salesperson, Phyllis can choose one of two methods of annual payment: either an annual salary of $35,000 with no...

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As a salesperson, Phyllis can choose one of two methods of annual payment: either an annual salary of $35,000 with no commissions or an annual salary of $10,000 plus a 20 percent commission on her total annual sales. What must her total annual sales be to give her the same annual pay with either method?

A. $100,000
B. $120,000
C. $125,000
D. $130,000
E. $132,000

The OA is C

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BTGmoderatorLU wrote:
Sun Jul 19, 2020 7:49 am
Source: GMAT Paper Tests

As a salesperson, Phyllis can choose one of two methods of annual payment: either an annual salary of $35,000 with no commissions or an annual salary of $10,000 plus a 20 percent commission on her total annual sales. What must her total annual sales be to give her the same annual pay with either method?

A. $100,000
B. $120,000
C. $125,000
D. $130,000
E. $132,000

The OA is C
Solution:

We can let Phyllis’s annual sales be x dollars and create the equation:

10,000 + 0.2x = 35,000

0.2x = 25,000

x = 25,000/0.2 = 125,000

Answer: C

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BTGmoderatorLU wrote:
Sun Jul 19, 2020 7:49 am
Source: GMAT Paper Tests

As a salesperson, Phyllis can choose one of two methods of annual payment: either an annual salary of $35,000 with no commissions or an annual salary of $10,000 plus a 20 percent commission on her total annual sales. What must her total annual sales be to give her the same annual pay with either method?

A. $100,000
B. $120,000
C. $125,000
D. $130,000
E. $132,000

The OA is C
For the first payment method, she receives $35,000

Payment = annual salary of $10,000 plus a 20 percent commission on her total annual sales
Let x = Phyllis' annual sales
So: her payment = 10,000 + (20% of x)
Simplify: payment = 10,000 + 0.2x

What must her total annual sales be to give her the same annual pay with either method?
If the two amounts are EQUAL, we can write: 10,000 + 0.2x = 35,000
Subtract 10,000 from both sides to get: 0.2x = 25,000
Solve: x = 25,000/0.2 = = 250,000/2 = 125,000

Answer: C

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
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