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# 5.5 - PowerPoint PPT Presentation

§ 5.5. Solving Commission, Percent of Increase or Decrease, and Interest Problems. Solving Commission Problems.

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### § 5.5

Solving Commission, Percent of Increase or Decrease, and Interest Problems

The amount of money a person makes that is a percentage of the value of sales is called a commission. It is calculated by multiplying the percentage (called the commission rate) by the value of the sales.

Commission = commission rate  value of sales

Example:

A salesperson has a commission rate of 18.5%. He sells \$43,250 worth of goods. What is his commission?

Commission = commission rate  value of sales

= 18.5%  \$43,250

= 0.18.5  43,250

= 8001.25

His commission is \$8,001.25.

We sometimes need to find the percent by which a number increases or decreases.

Example:

The cost of a certain car increased from \$16,000 last year to \$17,280 this year. What was the percent of increase?

Amount of increase = original amount – new amount

= 17,280 – 16,000 = 1280

The car’s cost increased by 8%.

Example:

Patrick weighed 285 pounds two years ago. After dieting, he reduced his weight to 171 pounds. What was the percent of decrease in his weight?

Amount of decrease = original amount – new amount

= 285 – 171 = 114

Patrick’s weight decreased by 40%.

Interest is money paid for the use of money. The principal is the amount deposited or borrowed. The interest rate is per year, unless otherwise stated. If the interest rate is in years, the time must also be in years.

Interest = principal  rate  time

I = PR T

Example:

Find the simple interest on a loan of \$3600 borrowed at 6% for 8 years.

I = PR T

= 3600  0.06  8

= 1728

The interest earned is \$1,728.