Commission is the amount of money paid to an agent for buying or selling goods. When the commission is some percent of the value of the services performed, that rate percent is called the rate of commission.
Gross proceeds or selling price is the money received by the agent for his employer. In commission calculations this is called the base. Net proceeds is the gross proceeds minus the commission.
To find the commission, multiply the principle amount, or base, by the rate of commission.
Formula: Commission (P) = Base (B) x R (R),
or... P = B x R
Example: A real estate agent sold a piece of property
for $50,000. His commission is 7.5%.
How much does he receive?
P = $50,000, B = 7.5% P = ?
$50,000 x .075 = $3,750.00 commission - Answer
Example: A salesman received $630 for selling a boat.
His rate of commission was 5.25%.
What was the selling price?
P / R = B
P = 630; R = 5.25, R = ?
$630 / .0525 = $12,000 selling price - Answer