A is entitled to a commission of 10% on the net profit after charging the commission. The profit before charging the commission is ₹1,10,000. What is A’s commission?

Correct answer: ₹10,000

The profit after charging commission is ₹1,10,000 − commission. If the commission is C, then \(C=10\%\times(1,10,000-C)\). Therefore, \(C=\frac{10}{110}\times1,10,000=₹10,000\). Option A incorrectly applies 10% to the profit before commission. Exam tip: when commission is calculated on profit after charging commission, use \(\frac{rate}{100+rate}\times\) profit before commission.