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Roland2rule wrote:Russell sells used cars and receives a $75 commission plus 1% of the sticker price for each car sold. Last week, Russell sold 8 cars for an average price of $7,787.50. What were his earnings last week?

(a). $600
(b). $623
(c). $698
(d). $1223
(e). $6830

OA is D
What could be the earnings here? OA says C. But I want an Expert explanation on this.

Earning per car = 75 + 1% of sticker price

Earning from 8 cars = 8*(75 + 1% of average price) = 8*(75 + 1% of 7787.50) = 8*(75 + 77.875) = 8*(75 + ~75) = ~8*150 = ~$1200.

The correct answer: D

Hope this helps!

-Jay
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Roland2rule wrote:Russell sells used cars and receives a $75 commission plus 1% of the sticker price for each car sold. Last week, Russell sold 8 cars for an average price of $7,787.50. What were his earnings last week?

(a). $600
(b). $623
(c). $698
(d). $1223
(e). $6830

Since Russell receives a $75 commission plus 1% of the sticker price for each car sold, last week he earned:

8 x 75 + 0.01(8 x 7,787.50) = 600 + 0.01(62,300) = 600 + 623 = $1,223

Answer: D

Hi Roland2rule,

We're told that Russell sells used cars and receives a $75 commission plus 1% of the sticker price for each car sold. Last week, Russell sold 8 cars for an average price of $7,787.50. We're asked for his earnings last week. The answer choices to this question are 'spaced out' enough that you can actually avoid doing lots of 'math' and use a bit of logic - and some estimation - to get to the correct answer.

To start, since there are 8 cars, we know that the 'fixed' part of the commission = (8)($75) = $600

1% of $7,787.50 is a bit more than 1% of $7,700 = $77+. $77+ is rather close to $75, so the 1% part of the commission will get Russell approximately another $600+.

Thus, the total is approximately $600+ $600+ = $1200+. There's only one answer that's a little more than $1200...

Final Answer: D

GMAT assassins aren't born, they're made,
Rich