Commission and Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula: Simple Interest = Principal × Rate × Time.

Front

How do you calculate Simple Interest?

Back

To calculate Simple Interest, use the formula: Simple Interest = Principal × Rate × Time, where Principal is the initial amount, Rate is the interest rate (in decimal), and Time is the duration in years.

Front

What is the formula for calculating the total amount after Simple Interest is applied?

Back

Total Amount = Principal + Simple Interest.

Front

If you invest $1,000 at a 5% annual interest rate for 3 years, how much interest will you earn?

Back

$150 (Simple Interest = $1,000 × 0.05 × 3 = $150).

Front

What is Commission?

Back

Commission is a fee paid to an agent or employee for facilitating a sale, usually calculated as a percentage of the sale amount.

Front

How do you calculate Commission?

Back

To calculate Commission, use the formula: Commission = Sale Amount × Commission Rate.

Front

If Emma earns 8% commission on $2,400 in sales, how much does she earn?

Back

$192 (Commission = $2,400 × 0.08 = $192).

Front

What is the relationship between Commission Rate and Total Sales?

Back

The Commission Rate determines how much an individual earns based on the Total Sales. A higher Commission Rate results in higher earnings for the same amount of sales.

Front

If Timothy sells 6 toasters at $20 each and earns a 15% commission, how much does he earn?

Back

$18 (Total Sales = 6 × $20 = $120; Commission = $120 × 0.15 = $18).

Front

What is the significance of the time period in Simple Interest calculations?

Back

The time period affects the amount of interest earned; longer time periods result in more interest, as interest is calculated for each year.