Real Estate Math
A Connecticut agent earns a total of $72,000 in commissions in a year. The agent's broker split is 60% to the agent. How much did the total sales volume need to be if the average commission rate was 2.8% on the agent's side?
A$2,571,429✓ Correct
B$4,285,714
C$1,500,000
D$3,000,000
Explanation
Agent net = $72,000 = agent's total earned commissions. Agent's total commission = $72,000 ÷ 60% = $120,000. Total sales volume = $120,000 ÷ 2.8% = $4,285,714. But wait: the agent earns $72,000 after split. Agent commission before split = $72,000 ÷ 0.60 = $120,000. Volume = $120,000 ÷ 0.028 = $4,285,714. The8% = $72,000: $72,000 ÷ 0.028 = $2,571,429. This would be the volume if there were no split.
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