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Learning Targets

• I understand and can solve problems about commission, interest, markups, and discounts.

There are many everyday situations where a percentage of an amount of money is added to or subtracted from that amount, in order to be paid to some other person or organization. Copy this table into your notes:

For example,

• If a restaurant bill is $34 and the customer pays $40, they left $6 dollars as a tip for the server. That is 18% in $34, so they left an 18% tip. From the customer's perspective, we can think of this as an 18% increase of the restaurant bill.

• If a realtor helps a family sell their home for $200,000 and earns a 3% commission, then the realtor makes $6,000, because (0.03) ⋅ 200,000 = 6,000, and the family gets $194,000, because 200,000 − 6,000 = 194,000. From the family's perspective, we can think of this as a 3% decrease on the sale price of the home.

A mark-up is a percentage that businesses often add to the price of an item they sell.

A mark-down is a percentage they subtract from a given price.

When items (cars, clothes, etc.) are being sold, there are different prices for which they are sold.

• • wholesale price: the price the company (dealership, store) pays for the item

  • retail price: the marked-up price the company charges to sell the product

Commission is the money a salesperson gets when they sell an item. It is usually used as an incentive for employees to try to sell more or higher priced items than they usually would. The commission is usually a percentage of the price of the item they sell.

1. For each gym membership sold, the gym keeps $42 and the employee who sold it gets $8. What is the commission the employee earned as a percentage of the total cost of the gym membership?

2. If an employee sells a family pass for $135, what is the amount of the commission they get to keep?