INTEREST

AND COMMISSIONS
for Business Mathematics
Senior High School (ABM)
Quarter 2 / Week 1

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 FOREWORD

This self-learning kit will serve as a guide in illustrating

the different types of commissions and in computing
commissions on cash basis and commissions on installment
basis. It includes solving real-life problems by applying your
knowledge on the different types of commissions.
In this learning kit, you will gain knowledge in
computing different types of commissions and
commissions on cash basis and commissions on installment
basis.
I. What Happened
This part contains review of prior knowledge that has
a great contribution to the focused topic of this module.
This also contains preliminary activities that will awaken the
prior knowledge of the learners and will motivate them to
learn.
II. What You Need To Know
This section contains the definition of commission, its
types, and how to compute commission on cash basis and
installment basis. You will apply and learn more important
real-life problems involving simple interest and
commissions. It gives examples that clearly illustrate the
applicability of a mathematical concept.
III. What Have I Learned
The exercises found in this section are guaranteed to
develop mathematical understanding, skills, and
competence. These serve as an analytical tool to identify
the learners’ areas of strengths and difficulties.

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 LESSON COMMISSIONS
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OBJECTIVES:
K: Define commission and the different types of
commission;
S: Compute commission on cash and on installment
bases;
A: Appreciate the process of computing
commission on cash and on installment bases

I. WHAT HAPPENED

PRE-TEST:

Answer the following problems. Write your answers in your activity

notebook.

1. It is a fee that a business pays to a salesperson (agent) in exchange for

his services in facilitating, supervising, or completing a sale.
a. Capital b. Commission c. Interest d. Sales
2. It is a form of payment to an agent for services rendered.

a. Capital b. Commission c. Interest d. Sales

3. This type of commission is very profitable if you are selling high-ticket

items.

a. graduated b. salary plus c. straight d. all of the

above

4. Glacian receives 5% commission for every printer he sells. If he was able

to sell 5 printers at ₱5,500.00 each, how much does Glacian make in
commission?
a. ₱13.75 b. ₱137.50 c. ₱275.00 d. ₱1,375.00

5. Hershey received the amount of ₱899.85 as her commission for selling a

cell phone that costs ₱5999.00. How many percent was given to Hershey
as her commission?
a. 5% b. 10% c. 15% d. 20%
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II. WHAT YOU NEED TO KNOW

DISCUSSION:
A commission is a fee that a business pays to a salesperson (agent) in
exchange for his services in facilitating, supervising, or completing a sale. The
commission may be based on a flat arrangement or as a percentage of the
revenue generated by a salesperson. In other words, commission
(remuneration) is a form of payment to an agent for services rendere

There are three different types of commission:

1. Straight Commission
- also called (revenue commission) is a commission based on a
percentage of sales only. (This is very profitable if you are selling high-
ticket items.)
Example 1:
Mark receives 20% commission on the appliances he sells. If he sell
a TV for ₱7,000, a refrigerator for ₱12,000, and a heater for ₱1500, how
much does Mark make in commission?
Solution:
Total sales = ₱7,000 + ₱12,000 + ₱1,500 = ₱20,500
Commission = ₱20,500 x 20% = ₱ 20,500 x 0.2 = ₱4,100
Therefore, Mark had ₱4,100 as his commission.
2. Salary plus Commission
- a commission in which a salesperson gets his basic salary and a
percentage of whatever sales he makes.
Example 2:
Mark decides to work for another company that will pay him
₱2, 000 per week and 10% commission on sales above ₱20, 000 for the
week. If he sold goods worth ₱26, 000, what is his gross pay (salary plus
commission)?
Solution:
Amount of goods sold minus salary of ₱20,000.
➢ ₱26,000 – ₱20,000 = ₱6,000
His commission will be ₱6,000 x 10% = ₱6,000 x 0.1 = ₱600.
Therefore, his gross pay for the week is ₱2,000 + ₱600 = ₱2,600.

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3. Graduated Commission
- a commission, which varies according to how much sales, is made.
Example 3:
Mark works for a company that pays him 2% on the first ₱20,000 sold,
3% on the next ₱30,000 sold, and 5% on all sales beyond ₱50,000. What
is his gross pay if he sells ₱60,000?
Solution:
First commission share = ₱20, 000 x 2% = ₱20, 000 x 0.02 = ₱400
Second commission = ₱30, 000 x 3% = ₱30,000 x 0.03 = ₱900

Third commission = (₱60,000–₱50,000) x 5%=₱10,000x0.05 = ₱500

Therefore, his gross pay is ₱400 + ₱900 + ₱500 = ₱1,800.
Computing Commissions on Cash Basis
This type of commission is similar to computing straight commissions.

Example 4:
Mark works at ABC Gadget Store. For every cash purchase of a cell
phone, he gets 6.1% commission. In a particular month, he was able to
sell 10 cell phones costing ₱18, 000 each. How much was his total
commission for such cash sales?
Solution:
Total Sales = ₱18,000/cell phone x 10 cell phones = ₱180,000
Cash commission = ₱180,000 x 6.1% = ₱180,000 x 0.061 = ₱10,980
Mark had a total commission of ₱10,980.
Commission on Installment Basis
Example 5:
At ABC Gadget Store, some items are paid on installment basis
through credit cards. Mike was able to sell 10 cell phones costing
₱18,000 each. Each transaction is payable in 6 months equally divided
into 6 equal installments without interest. Mike gets 2% commission on
the first month for each of the 10 cell phones. Commission decreases by
0.30% every month thereafter and computed on the outstanding
balance for the month. How much commission does Mike receive on
the first month? On the second month? On the third month? On the
fourth month? On the fifth month? On the sixth month? At the end of
installment period, how much will be his total commission?

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Solution:
First month commission:
₱18,000/cell phone x 10 cell phones x 0.02 = ₱3,600
Second month commission:
₱15,000/cell phone x 10 cell phones x (0.02 – 0.003) = ₱2,550
Third month commission:
₱ 12,000/cell phone x 10 cell phones x (0.017 – 0.003) = ₱1,680
Fourth month commission:
₱9,000/cell phone x 10 cell phones x (0.014 – 0 .003) = ₱990
Fifth month commission:
₱6,000/cell phone x 10 cell phones x (0.011 – 0.003) = ₱480
Sixth month commission:
₱3,000/cell phone x 10 cell phones x (0.008 – 0.003) = ₱150
His total commission for six months is ₱9,450.

III. WHAT HAVE I LEARNED

EVALUATION/POST TEST

Solve the following problems. Write your answers in your activity notebook.

1. A car salesman earns a 3% commission on sales. If he sells a car for

₱27,990.00, how much commission will he earn?

2. Noel works as a furniture salesman and earns a base salary of ₱350 per
week plus 6% commission on sales. What was Noel’s weekly gross salary if his
total sales were PhP3750?

3. Hel Jon works for a company that pays him 2% on the first ₱20,000 sold,
3% on the next ₱30,000 sold and 5% on all sales beyond ₱50,000. What is his
gross pay if he sells ₱80,000?

4. Jonalen was able to sell 5 portable speakers costing ₱2,000 each on installment
basis equally divided into 4 equal installments without interest. She gets 3% commission
on the first month for each of the 5 portable speakers she sold. Commission decreases
by 0.25% every month thereafter and computed on the outstanding balance for the
month. How much commission does Jonalen receive at the end of installment
period?

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 REFERENCE

Learning Resource Portal. (n.d.). Retrieved from Teaching Guide for Senior
High School on BUSINESS MATHEMATICS :
https://lrmds.deped.gov.ph/detail/12801

Riley, J., & Riley, G. (n.d.). tutor2u. Retrieved 09 29, 2020, from Business:
Reference Library:
https://www.tutor2u.net/business/reference/commission#:~:text=Commi
ssion%20is%20a%20payment%20made,%2Drelated%20pay%2C%20bonus
es).&text=After%20all%2C%20businesses%20exist%20to,not%20just%20to%
20make%20things

Commission Worksheet
http://www.mlbgsd.k12.pa.us/cms/lib/PA09000085/Centricity/Domain/7
5/Extra%20Commissions%20Worksheet%20-%202.pdf

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 SYNOPSIS AND ABOUT THE AUTHOR
This SLK (Self-Learning Kit) ANSWER
is about the different types of KEYS
commissions on how to solve

You will surely appreciate

the learning that you will gain
from the discussion and
examples provided in this kit that
would be very helpful in your
daily living especially in our world
where business is life.

Have fun and enjoy yourself

in learning through this kit.
AUTHOR
MARY GRACE C. BONGABONG graduated her
undergraduate and master’s degree at Negros Oriental
State University (NORSU), Main Campus I with the degrees,
Bachelor of Science in Mathematics (BSMATH) and Master
of Science in Mathematics (MSMath). Currently, she has
almost completed the academic requirements for Doctor
of Philosophy in Mathematics (PhDMath) of the same
school.

At present, Mrs. Bongabong is the focal person of the

Senior High School Department of Aurelia G. Merecido
Memorial High School located at Cabangahan, Siaton,
Negros Oriental handling Mathematics subject and
Researches. She is also the ICT and the School Planning

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 LESSON SOLVING PROBLEMS INVOLVING INTEREST
2 AND COMMISSIONS

OBJECTIVES:
K. Identify steps in solving problems involving interest
and commissions.
S. Construct a step by step process in solving simple
interest and commission word problems.
A. Challenge oneself in solving real-life problems
involving simple interest and commission.

I. WHAT HAPPENED
PRE-TEST:

I. Identify the following statements:

1. Money paid regularly at a particular rate for the use of

money lent, or for delaying the repayment of a debt.

2. A fixed price paid or charged for something, especially

goods or services.

3. It is the monetary charge for the privilege of borrowing

money, typically expressed as an annual percentage rate.

4. Amount of money to be invested.

5. The act of committing or entrusting a person, group, etc.,

with supervisory power or authority.

6. An allowance, commission, or rate of interest calculated

by percent.

7. Of, relating to, or engaged in sales.

8. Payment for services to a worker, usually remuneration on

an hourly, daily, or weekly basis.

9. A fixed compensation periodically paid to a person for

regular work or services.

10. Revenue received for goods or services, or from other

sources, as rents or investments.
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 II. WHAT YOU NEED TO KNOW
Have you ever lent or borrowed money from your friend or relative?
What happened when you returned the money? Did you return same amount
you borrowed? Well, that extra amount you pay when settling a debt or loan
is what is referred to as interest and this concept is called simple interest.

DISCUSSION

Commission

We recall that a commission is a fee that a business pays to a salesperson

(agent) in exchange for his services in either facilitating, supervising, or
completing a sale. The commission may be based on a flat arrangement or as
a percentage of the revenue generated by a salesperson. In other words,
commission (remuneration) is a form of payment to an agent for services
rendered.

Three different types of commission:

1. Straight Commission, also called (revenue commission)

– a commission based on a percentage of sales only. (This is very
profitable if you are selling high-ticket items.)

Example 1:

Mike receives 20% commission on the appliances he sells. If he sell a TV

for PhP7,000, a refrigerator for PhP12,000, and a heater for PhP 1500, how
much does Mike make in commission?

Solution:

Total sales = PhP7,000 + PhP12,000 + PhP1,500 = PhP20,500 Commission

= PhP20,500 x 20% = PhP 20,500 x 0.2 = PhP4,100

Salary plus Commission – a commission in which a salesperson gets his basic

salary and a percentage of whatever sales he makes.

Example 2:

Mike decides to work for another company that will pay him PhP2,000
per week and 10% commission on sales above PhP20,000 for the week.
If he sold goods worth PhP26,000, what is his gross pay (salary plus
commission)?
Solution:

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 Amount of goods sold minus salary of PhP20,000 = PhP26,000 – PhP20,000
= PhP6,000 His commission will be PhP6,000 x 10% = PhP6,000 x 0.1 =
PhP600 Therefore, his gross pay for the week is PhP2,000 + PhP600 =
PhP2,600.

2. Graduated Commission – a commission, which varies according to

how much sales, is made.

Example 3:

Mike works for a company that pays him 2% on the first PhP 20,000 sold,
3% on the next PhP 30,000 sold and 5% on all sales beyond PhP50,000.
What is his gross pay if he sells PhP 60,000?

Solution:

First commission share = PhP20,000 x 2% = PhP20,000 x 0.02 = PhP400

Second commission = PhP30,000 x 3% = +30,000 x 0.03 = PhP900 Third
commission = (PhP60,000 – PhP50,000) x 5% = PhP10,000 x 0.05 = PhP500
Therefore, his gross pay is PhP400 + PhP900 + PhP500 = PhP1,800 Note that
this type of commission is lucrative for high achievers.

Interest
When you deposit money in a bank, the bank usually pays you for the
use of your money. When you take out a loan from a bank, you have to pay
the bank for the use of their money. In both cases, the money paid is called
the interest. It is usually expressed as a percent. Here we shall look at a formula
for simple interest

Simple Interest Equation (Principal + Interest)

Recall that the formula in solving Simple interest follows the format
A = P(1 + rt)
Where:

• A = Total Accrued Amount (principal + interest)

• P = Principal Amount
• I = Interest Amount
• r = Rate of Interest per year in decimal; r = R/100
• R = Rate of Interest per year as a percent; R = r * 100
• t = Time Period involved in months or years

From the base formula, A = P(1 + rt) derived from A = P + I and since I =
Prt then A = P + I becomes A = P + Prt which can be rewritten as A = P(1
+ rt)
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 Note that rate r and time t should be in the same time units such as months or years. Time
conversions that are based on day count of 365 days/year have 30.4167 days/month and
91.2501 days/quarter. 360 days/year have 30 days/month and 90 days/quarter.

How To Solve Interest Problems Using The Simple Interest Formula?

Interest represents a change in money.

If you have a savings account, the interest will increase your balance
based upon the interest rate paid by the bank.

If you have a loan, the interest will increase the amount you owe based
upon the interest rate charged by the bank.

Example:
Sarah deposits PhP4,000 at a bank at an interest rate of 4.5% per year. How
much interest will she earn at the end of 3 years?

Solution:
Simple Interest = 4,000 × 4.5% × 3 = 540

She earns PhP540 at the end of 3 years.

Example:

Wanda borrowed PhP3,000 from a bank at an interest rate of 12% per year for
a 2-year period. How much interest does she have to pay the bank at the end
of 2 years?

Solution:
Simple Interest = 3,000 × 12% × 2 = 720

She has to pay the bank PhP720 at the end of 2 years.

Example:
Raymond bought a car for PhP40, 000. He took a PhP20,000 loan from a bank
at an interest rate of 13% per year for a 3-year period. What is the total
amount (interest and loan) that he would have to pay the bank at the end of
3 years?

Solution:
Simple Interest = 20,000 × 13% × 3 = 7,800

At the end of 3 years, he would have to pay PhP20,000 + PhP7,800 = PhP27,800.

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III. WHAT HAVE I LEARNED
EVALUATION/POST TEST:
I. Answer the following problems. Show your answers in a short bond
paper.

1. John wants to have an interest income of PhP3,000 a year. How much

must he invest for one year at 8%?
2. A stock broker receives a commission of 11% for selling annuities to her
clients. If she sells PhP50,000 in annuities, how much commission will she
earn?
3. The Jones family purchases PhP350,000 in life insurance from an
insurance broker. How much will they pay the insurance broker if she
charges a 0.5% commission?
4. A car salesman earns a 3% commission on sales. If he sells a car for
PhP27,990, how much commission will he earn?
5. Simple interest on a certain sum is 16 of the sum. Find the rate percent
25
and time if both are numerically equal. [Hint: (T=R), P= x, S.I= 16
x ].
25

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 REFERENCES

https://www.storyofmathematics.com/?s=commission, Luke Mastin,An

Elite Cafemedia Publisher, 2020

N.D.Lopez-Mariano, Business Mathematics,Rex Book Store, 2016. Pp 149-

150

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 DEPARTMENT OF EDUCATION
SCHOOLS DIVISION OF NEGROS ORIENTAL

SENEN PRISCILLO P. PAULIN, CESO V

Schools Division Superintendent

JOELYZA M. ARCILLA, EdD

Assistant Schools Division Superintendent

MARCELO K. PALISPIS, EdD

Assistant Schools Division Superintendent

NILITA L. RAGAY, Ed.D.

Assistant Schools Division Superintendent
CID Chief

ROSELA R. ABIERA
Education Program Supervisor – (LRMS)

ELISA L. BAGUIO, EdD

Division Education Program Supervisor – MATHEMATICS

MARICEL S. RASID
Librarian II (LRMDS)

ELMAR L. CABRERA
PDO II (LRMDS)

MARY GRACE C.
BONGABONG THERESE
FATIMA FABE SEVILLA
Writers

RADHIYA A. ABABON
Lay-out Artist

ALPHA QA TEAM
RICKLEOBEN V. BAYKING
LITTIE BETH S. BERNADEZ
MERCYDITHA D. ENOLPE
RONALD TOLENTINO

BETA QA TEAM
RICKLEOBEN V. BAYKING
LITTIE BETH S. BERNADEZ
GIL S. DAEL
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MARIA ACENITH D PASTOR
JEE LIZA T. INGUITO
MERCYDITHA D. ENOLPE
RONALD G. TOLENTINO

ENHANCEMENT TEAM
DONNA D. FRANCISCO
ANGELICA G. ZAMBRANO

DISCLAIMER

The information, activities and assessments used in this material are designed to provide accessible
learning modality to the teachers and learners of the Division of Negros Oriental. The contents of this module are
carefully researched, chosen, and evaluated to comply with the set learning competencies. The writers and
evaluator were clearly instructed to give credits to information and illustrations used to substantiate this material.
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All content is subject to copyright and may not be reproduced in any form without expressed written consent from
the division.
 SYNOPSIS AND ABOUT THE AUTHOR

This Self-Learning Kit (SLK) ANSWER KEY

is about simple interest and
commissions and its application in
real-life situations.

You will surely appreciate

the learning that you will gain
from the discussion and examples
provided in this kit that would be
very helpful in your daily living
especially in our world where
business is life.

Have fun and enjoy yourself

in learning through this kit.

AUTHOR

Course/s: Bachelor of Science in Computer

Bachelor of Secondary Education Major in

Mathematics (Villaflores College-Tanjay
City- 2014)
Masters of Science in Mathematics
(NORSU-Main Dumaguete City- 2020)

Negros Oriental High School

Email: