Question

Joe can choose between a monthly salary of $1,800 plus 6.5% of sales or $2,100 plus 4% of sales. He expects sales between $5,000 and $10,000 a month. Which salary option should he choose?

Answer 1

Joe should choose $2100 + 4% of Sales

Explanation:

The options available to Joe are ($1800 + 6.5% of sales) and ($2100 + 4% of sales) for his salary. He chooses the option in which he would get higher salary. Sales are expected to lie between $5000 and $10000.

Let the sales be denoted by
`x` (in Dollars). Joe chooses first option if it is a higher number than the second.

⇒ if
`1800+(6.5)/(100)x>2100+(4)/(100)x`

`(2.5)/(100)x>300\\x>12000`

So, he chooses first option if
`x(=Sales)>12000`. However sales is between $5000 and $10000. So, Joe will go with second option.

∴ Joe should choose $2100 + 4% of sales.