A real estate broker earns a fixed percentage of the selling price of a house as a commission. The broker sold a house for $278,000 and earned a commission of $16,680. What would the broker's commission be on a house that sells for $324,000?
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Answer:
The rate of the commissioncan be found by setting up a proportion comparingthe commission on each sale to the selling price ofeach house,.Cross-multiplyingproduces the equation 278,000x= (16,680)(324,000),which results in x=19,440.Therefore, the amountof commission that will be earned for a house witha selling price of $324,000 is $19,440.Choice A is incorrect. This answer may bethe result of incorrectly setting up theproportion as 16,680x =324,000278,000, solving16,680 × 278,000 = 324,000x, and then roundingthe answer down to $14,311.Choice C is incorrect. This answer may be theresult of not using a proportion, but insteadfinding the difference in the two selling prices,yielding 324,000 – 278,000 = 46,000.Choice D is incorrect. This answer may be the resultof not using a proportion, but instead subtractingthe two selling prices (324,000 – 278,000 = 46,000)and then adding the commission from the first sale(46,000 + 16,680 = 62,680