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A is entitled to twenty percent commission on profit before charging commission. Profit before commission is seventy five thousand rupees. What is the commission?

Answer and explanation

Correct answer: Fifteen thousand rupees

The direct answer is Option B: Rs 15,000. The phrase ‘commission on profit before charging commission’ means the base is the full profit before deducting commission. Compute 20% of Rs 75,000: \\(20/100 \\times 75,000 = Rs 15,000\\). Therefore A’s commission is Rs 15,000. Option B is correct. Option A, Rs 12,500, would result from a different base or an incorrect calculation. Option C, Rs 18,750, is not 20% of Rs 75,000 and may arise from an unsuitable reverse formula. Option D, Rs 60,000, is 80% of the profit, not the commission. The common mistake is using the formula for commission after charging commission; here the question clearly says before charging commission.

Related tags

Commission Before ChargingNumericalProfit Distribution

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