If a property is listed for $450,000 with a commission rate of 4 1/2%, what is the total dollar amount of commission earned?

If a property is listed for $450,000 with a commission rate of 4 1/2%, what is the total dollar amount of commission earned?

• A. $11,137.50
• B. $20,250
• C. $25,000
• D. $15,750

Answer: (B)

To find the total dollar amount of commission earned, you need to calculate the percentage of the listing price that corresponds to the commission rate. First, convert the commission rate from a percentage to a decimal. The commission rate of 4 1/2% is the same as 4.5%, which can be expressed as 0.045 in decimal form. Next, multiply the listing price of the property by the commission rate: - Listing Price: $450,000 - Commission Rate: 0.045 Now, perform the calculation: Total Commission = Listing Price × Commission Rate Total Commission = $450,000 × 0.045 Total Commission = $20,250 This calculation confirms that the total dollar amount of commission earned is indeed $20,250, making it the correct answer. Understanding this formula and process is essential in real estate transactions, as it allows agents to accurately determine their earnings based on the commission structure.

To find the total dollar amount of commission earned, you need to calculate the percentage of the listing price that corresponds to the commission rate.

First, convert the commission rate from a percentage to a decimal. The commission rate of 4 1/2% is the same as 4.5%, which can be expressed as 0.045 in decimal form.

Next, multiply the listing price of the property by the commission rate:

• Listing Price: $450,000

• Commission Rate: 0.045

Now, perform the calculation:

Total Commission = Listing Price × Commission Rate

Total Commission = $450,000 × 0.045

Total Commission = $20,250

This calculation confirms that the total dollar amount of commission earned is indeed $20,250, making it the correct answer. Understanding this formula and process is essential in real estate transactions, as it allows agents to accurately determine their earnings based on the commission structure.