How much total commission would be owed on a property sold for $150,000 with a tiered commission rate of 6% on the first $50,000 and 5% on the remainder?

To calculate the total commission owed on the property sold for $150,000 with a tiered commission structure, we first need to break the sale price down into the portions that are subject to different commission rates.

The first tier is the first $50,000, which is subject to a commission rate of 6%. To find the commission on this portion, we multiply:

First tier commission:
$50,000 * 6% = $3,000

Next, we look at the remainder of the sale price, which is $150,000 - $50,000 = $100,000. This portion is subject to a commission rate of 5%. We calculate that commission as follows:

Second tier commission:
$100,000 * 5% = $5,000

Now, to find the total commission, we combine the commissions from both tiers:

Total commission:
$3,000 (first tier) + $5,000 (second tier) = $8,000

Thus, the total commission owed on the property sale would be $8,000, making this the correct answer. This tiered commission structure is essential in real estate transactions as it incentivizes agents by providing higher percentages on initial values