As a salesperson, Phyllis can choose one of two methods of

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swerve: Legendary Member; Posts: 2604; Joined: Sun Oct 29, 2017 2:04 pmFollowed by: 6 members

by swerve » Sun Sep 08, 2019 4:07 am

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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 commission 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

Source: GMAT Paper Tests

Source: Beat The GMAT — Problem Solving | Sun Sep 08, 2019 4:07 am

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Brent@GMATPrepNow: GMAT Instructor; Posts: 16206; Joined: Mon Dec 08, 2008 6:26 pmFollowed by: 1268 members; Location: Vancouver, BC; Thanked: 5254 times; GMAT Score:770

by Brent@GMATPrepNow » Sun Sep 08, 2019 5:18 am

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

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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Scott@TargetTestPrep: GMAT Instructor; Posts: 8246; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

by Scott@TargetTestPrep » Thu Sep 12, 2019 10:21 am

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

Source: GMAT Paper Tests

We can let total annual sales = x and create the following equation:

35,000 = 10,000 + 0.2x

25,000 = 0.2x

125,000 = x

Answer: C

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