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Commission and Fees

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Warm Up

 

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Warm Up

 

7.2 pounds

4.2 feet

7.0 minutes

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7.RP.A.3

Use proportional relationships to solve multistep ratio and percent problems.

7.EE.A.2

Understand that rewriting an expression in different forms in a problem context can shed light on the problem and how the quantities in it are related.

Standards for Mathematical Content

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7.EE.B.3

Solve multi-step real-life and mathematical problems posed with positive and negative rational numbers in any form (whole numbers, fractions, and decimals), using tools strategically. Apply properties of operations to calculate with numbers in any form; convert between forms as appropriate; and assess the reasonableness of answers using mental computation and estimation strategies.

Standards for Mathematical Content

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MP1

Make sense of problems and persevere in solving them.

MP2

Reason abstractly and quantitatively.

MP3

Construct viable arguments and critique the reasoning of others.

Standards for Mathematical Practice

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MP4

Model with mathematics.

MP6

Attend to precision.

Standards for Mathematical Practice

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Students will solve problems involving commission and fees.

Lesson Goal

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The following are four ways in which people are paid.

Learn�Commission and Fees

Hourly

These employees are paid a set amount each hour, such as $15 per hour.

Salary

These employees are paid a set amount, no matter how many hours they work, such as $45,000 per year.

Commission Only

These employees are paid only a percent of the amount that they sell.

Salary plus

Commission

These employees are paid a small base salary, plus a percent of the amount that they sell.

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Some employees, such as realtors, car salespeople, and stockbrokers, are paid a percent of the amount that they sell. This payment is called a commission.

If you pay a commission to a person or business, you are paying a fee. A fee is a payment for a service. It can be a fixed amount, a percent of the charge, or both.

A realtor may earn 5% commission on the sale of a home. Suppose the realtor sells a house for $140,000. You can use equivalent ratios, and the percentage written as a rate per 100, to determine the amount of commission. Let c represent the amount of commission.

Learn�Commission and Fees

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Learn�Commission and Fees

amount of commission

price of house

 

Percent

Because 100 × 1,400 is 140,000, multiply 5 by 1,400 to find c.

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Learn�Commission and Fees

The amount of commission is $7,000. This means the real estate agent will be paid $7,000 for selling a $140,000 home.

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Example 1Find Commission

Angie works in a jewelry store and earns a 6.25% commission on every piece of jewelry she sells.

How much commission does she earn for selling a ring that costs $1,300?

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Example 1Find Commission

Think About It!

What is a good estimate for the solution? Explain how

you calculated the estimate.

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Example 1Find Commission

Method 1 Use ratio reasoning.

Write a proportion and solve using ratio reasoning. Let c represent the amount of commission.

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Example 1Find Commission

amount of commission

cost of ring

 

Percent

Because 100 × 13 = 1,300, multiply 6.25 by 13 to find the value of c.

 

6.25 × 13 = 81.25,

so, c = 81.25.

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Example 1Find Commission

Method 2 Use properties of operations.

=

Write the proportion. Let c represent the amount.

=

0.0625

Divide 6.25 by 100. A one-step equation results.

=

(0.0625) • 1,300

Multiplication Property of Equality

c

=

81.25

Simplify.

So, using either method, the amount of commission is $81.25.

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Example 1Find Commission

Talk About It!

How does your answer compare to your estimate?

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Example 1Find Commission

Check �Nathan sells jewelry and earns a 9.75% commission on every piece he sells. How much commission would he earn on a bracelet that sold for $220? Use any strategy.

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Example 1Find Commission

Check �Nathan sells jewelry and earns a 9.75% commission on every piece he sells. How much commission would he earn on a bracelet that sold for $220? Use any strategy.

$21.45

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Example 2Find the Amount of Sales

Caleb needs to earn $1,200 each month to cover his living expenses. He earns an 8% commission on everything he sells.

What is the minimum amount he needs to sell in order to earn $1,200?

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Example 2Find the Amount of Sales

Think About It!

Do you need to find the part, the percent, or the whole?

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Example 2Find the Amount of Sales

Write a proportion. Then solve using ratio reasoning. Let a represent the amount he needs to sell.

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Example 2Find the Amount of Sales

amount of commission

amount of sales

 

Percent

Because 8 × 150 = 1,200, multiply 100 by 150 to find

the value of a.

 

100 × 150 = 15,000,

so, a = 15,000.

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Example 2Find the Amount of Sales

So, Caleb needs to sell $15,000 to earn $1,200 in commission.

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Example 2Find the Amount of Sales

Talk About It!

How do you know your answer is reasonable?

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Example 2Find the Amount of Sales

Check

Quentin wants to earn at least $945 this month in commission. What is the minimum amount he needs to sell if he earns a 5.25% commission?

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Example 2Find the Amount of Sales

Check

Quentin wants to earn at least $945 this month in commission. What is the minimum amount he needs to sell if he earns a 5.25% commission?

$18,000

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Pause and Reflect

Did you make any errors when completing the Check exercise? What can you do to make sure you don’t repeat the errors in the future?

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Example 3Fees

Sybrina bought some paper supplies from an online retailer. The retailer charges a $6.95 shipping fee or 8% of the total purchase, whichever is greater.

If Sybrina's total purchase is $85.50, how much shipping will she pay?

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Example 3Fees

Think About It!

What is a good estimate for an 8% shipping fee? Explain how you calculated the estimate.

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Example 3Fees

Step 1 Find the percent of the total purchase.

Because the shipping fee may be 8% of the total purchase, find 8% of $85.50.

Write a proportion and solve using the properties of operations. Let x represent the potential shipping fee.

=

Write the proportion.

=

0.08

Divide 8 by 100.

=

(0.08) • 85.50

Multiplication Property of Equality

x

=

6.84

Simplify.

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Example 3Fees

Step 2 Compare the two fees.

The 8% shipping fee of $6.84 is less than the $6.95 shipping fee. Sybrina must pay the greater amount.

So, Sybrina will pay $6.95 in shipping fees.

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Example 3Fees

Talk About It!

How can you solve the problem another way?

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Example 3Fees

Check

Tickets for a concert are sold by online ticket resellers. One company charges a fee of 4% of the ticket price. Another company charges a flat fee of $2.50. The ticket you want to buy costs $60.50. If you buy the ticket online, which is the lesser fee?

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Example 3Fees

Check

Tickets for a concert are sold by online ticket resellers. One company charges a fee of 4% of the ticket price. Another company charges a flat fee of $2.50. The ticket you want to buy costs $60.50. If you buy the ticket online, which is the lesser fee?

$2.42

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Apply Personal Finance

David is starting a new job in sales. He can choose to earn only a 10% commission on sales each month, or earn a monthly base salary of $1,500 with a 3% commission on sales over $7,500. Which pay method would earn him more money if he has an average sales of $16,000 each month?

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Apply Personal Finance

Talk About It!

How do you determine a 3% commission on sales over $7,500?

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Apply Personal Finance

Check

Kelly has a job in sales that pays only a commission of 24% of her total monthly sales. She is offered a new job with a monthly salary of $3,750 with a commission of 9.5% on her total monthly sales over $12,500. If she estimates her total monthly sales will average $20,000, which statement is correct?

A. The new job will pay more because she would earn $4,462.50, and her current job only pays $4,220.

B. The new job will pay more because she would earn $4,742.75, and her current job only pays $4,220.

C. Her current job will pay more because she will earn $4,800, and the new job would only pay $4,462.50.

D. Her current job will pay more because she will earn $4,800, and the new job would only pay $4,742.75.

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Apply Personal Finance

Check

Kelly has a job in sales that pays only a commission of 24% of her total monthly sales. She is offered a new job with a monthly salary of $3,750 with a commission of 9.5% on her total monthly sales over $12,500. If she estimates her total monthly sales will average $20,000, which statement is correct?

A. The new job will pay more because she would earn $4,462.50, and her current job only pays $4,220.

B. The new job will pay more because she would earn $4,742.75, and her current job only pays $4,220.

C. Her current job will pay more because she will earn $4,800, and the new job would only pay $4,462.50.

D. Her current job will pay more because she will earn $4,800, and the new job would only pay $4,742.75.

C

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Pause and Reflect

How are parts and wholes represented in fees and commissions? Give examples to support your answer.

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Exit Ticket

Suppose you are offered a job that pays a base salary of $300 plus 5% commission on sales per week. Explain how to determine your weekly pay.

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Exit Ticket

Suppose you are offered a job that pays a base salary of $300 plus 5% commission on sales per week. Explain how to determine your weekly pay.

Sample answer: Multiply the amount in sales by 5%, or 0.05. Then add the base salary of $300.

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