Joe can choose between a monthly salary of $1,800 plus 6.5% of sales or $2,100 plus 4% of sales. He expects sales between $5,000 and $10,000 a month. Which salary option should he choose?

Accepted Solution

Answer:Joe should choose $2100 + 4% of SalesStep-by-step explanation:        The options available to Joe are ($1800 + 6.5% of sales) and ($2100 + 4% of sales) for his salary. He chooses the option in which he would get higher salary. Sales are expected to lie between $5000 and $10000.        Let the sales be denoted by [tex]x[/tex] (in Dollars). Joe chooses first option if it is a higher number than the second.     ⇒ if [tex]1800+\frac{6.5}{100}x>2100+\frac{4}{100}x[/tex]         [tex] \frac{2.5}{100}x>300\\x>12000[/tex]        So, he chooses first option if [tex]x(=Sales)>12000[/tex]. However sales is between $5000 and $10000. So, Joe will go with second option.∴ Joe should choose $2100 + 4% of sales.