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If commission on profit is before charging commission which formula is correct?

Answer and explanation

Correct answer: Profit times rate divided by one hundred

The direct answer is A: commission before charging commission equals profit × rate ÷ 100. If profit before commission is P and the rate is r%, then commission is P × r/100. For example, on Rs 70000 at 10%, commission is Rs 70000 × 10/100 = Rs 7000. Option A is correct because the entire stated profit is the base. Option B, profit × rate/(100 + rate), is the formula when commission is calculated after charging commission, not before it. Option C, profit × 100/rate, reverses the percentage operation and produces an excessive amount. Option D, profit minus rate, subtracts a percentage number from a rupee amount and is dimensionally and conceptually wrong. Remember the wording: “before” uses rate/100 directly; “after” uses rate/(100 + rate).

Related tags

Commission FormulaBefore ChargingConcept

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