Abu sells mutual funds for CIBC. On mutual funds sales, CIBC charges a "front-end load" or gross commission rate of 5%. Abu is paid on a graduated commission structure. He receives 30% commission on the first $50 000 worth of mutual funds he sells in a month, 40% commission for the next $50 000 worth of mutual funds, and 75% commission on all additional sales in the same month. What is Abu's commission for a month in which he sells $150 000 worth of mutual funds?
A) $3625
B) $2250
C) $2700
D) $4500
E) $5625

Question

Quizplus · Accepted Answer

Abu's commission on the first $50,000 is $50,000 x 5% x 30% = $750.His commission on the next $50,000 is $50,000 x 5% x 40% = $1,000.His commission on the remaining $50,000 is $50,000 x 5% x 75% = $1,875.His total commission is $750 + $1,000 + $1,875 = $3,625.

Abu Sells Mutual Funds for CIBC