3.

6 Mortgages
3.7 Commission and Overrides
3.6 MORTGAGES
A mortgage is probably the biggest
loan one can have. It is usually
obtained for a house, a house and
lot, or for a machinery or
equipment.
 
MORTGAGES LOAN
Mortgages loan is when you use your
property as collateral for a loan
from a financial institution.
 
Down Payment and Mortgage Loan
Assume that you purchase a secondhand car worth
₱312,500.00 and the seller requires a 20% down
payment.

Down payment = Purchase × Down payment %

= ₱312,500.00 × 20%
= ₱62,500
Mortgage loan = Purchase price – Down payment
= ₱312,500 – 62,500
= ₱250,000
Monthly Payment

Assume that the bank will charge you 5% annually. The 5% is

what is termed as the annual percentage rate or APR.

Where: A is the monthly payment;

P is the loan's initial amount;
A
i is the monthly interest rate; and
n is the total number of payments. = ₱1,342.05
amortization
● The installment payment on the loan is
termed amortization. The scheduled
prepared showing the installment payment
for the period of payment (called the term
of the loan) is called amortization table.
Amorzation Table
1. What is the amorzation schedule for the balance of ₱20,000 pesos with an
interest of 2% annually for 6 months.
Given: P = ₱20,000
i =
n =6
Solution:

= ₱3,352.84
Amorzation Table
1. What is the amorzation schedule for the balance of ₱20,000 pesos with a
monthly interest of 2% for 6 months.
Payment Amount Principal Interest Balance
(A – I) (B × i) (P – I)
0 ₱20,000
1 ₱3,352.84 ₱3,319.44 ₱33.4 ₱16,680.56
2 ₱3,352.84 ₱3,324.98 ₱27.86 ₱13,355.58
3 ₱3,352.84 ₱3,330.54 ₱22.30 ₱10,025.04
4 ₱3,352.84 ₱3,336.1 ₱16.74 ₱6,688.94
5 ₱3,352.84 ₱3,341.67 ₱11.17 ₱3,347.27
6 ₱3,352.86 ₱3,347.27 ₱5.59 ₱0.00
3.7 COMISSION
AND
OVERRIDES
Commission is a fee paid to person who makes a sale.

Overrides is the payment to marketing and/or product

managers based on the sales of people under them
 
 Plain commmission
It is the percentage of the sales made
wherein there is no additional
compensation given.
Plain Commission
1. Carmen Yambao is a sales agènt for the High Ace Reaty. She is paid based on
commission only. She is given a 2% commission on her sales. For the current
month, her sales was ₱1,035,000.00. Her commission (which is also her gross
earnings) would be:
Commission = Sales × Commission %
= ₱ 1,035,000 × 2%
= ₱ 20,700
2. Jed Montenegro is a car sales agent. He is paid commission only at the rate of
2.5%. For the current month, he sold two cars totaling ₱1,875,000.00. His
commission (gross earnings) would be:
Commission = Sales × Commission %
= ₱1,875,000.00 x 2.5%
= ₱46,875.00
Commission and Salary
1. If a sales agent earns a basic monthly salary of P10 000.00
and is paid a 3% commission on all his or her sales for the
month, he or she will have a gross earnings of basic salary plus
commission If he or she sold P30 000.00 for the month, her
gross earnings and commission will be
Gross Earnings = Basic Salary + Commission
= ₱10,000 + 3% × ₱30,000
= ₱10,000 + 900
= ₱10,900
Commission and Salary
2. Eugene Tito is a sales representative earning a basic salary of P18 000.00
a month plus 3% commission on his sales exceeding his quota of
₱15,000.00. Assume he made a total sales of ₱36 000.00 for the current
month. Find his gross earning.
Given: ₱18,000 Basic salary per month
3% Commission on sales above ₱15,000 (Sales-Quota)
₱36,000 Total sales
Find: Gross earnings
Solution: Gross Earnings = Basic Salary + Commission
= ₱18,000 + 3% (Sales – Quota)
= ₱18,000 + 3% (₱36,000 - ₱15,000)
= ₱18,000 + 3% (₱21,000)
= ₱18,000 + 360
= ₱18,630
Overrides
M. Coronilia is a product manager with five sales representatives under him.
The company gives him an annual salary of P126 000.00; commission of 5%
on his own sales; and an override of % on his men's sales. Find his gross
earnings for the month if his total sales is P365 500 with his men able to sell a
total of P1,548,263 for the month.
Given: Annual salary =P 126 000
His sales = P365 500
His men's sales = P1,548,263
His commission = 5% of his sales
His override = of his mens’ sales
Find: Gross earnings of M. Coronilia
Overrides
Given: Solution:
Annual salary =P 126 000 Commission = 5% × his own sales
His sales = P365 500 = 5% × P365 500
His men’s sales = P1,548,263 = ₱18,275.00
His commission = 5% of his sales
Override = men’s sales
His override = of his mens’ sales
Find: Gross earnings of M. Coronilia = 0.005 × ₱1,548,263
= ₱7,741.32
Basic salary =

= ₱10,500.00
Gross earnings = ₱36,516.32
 Transportation Allowance and Representation Allowance
Emmanuel Joshua is a marketing manager. He earns a basic salary of
P12,500.00 per month. He earns a 3% commission on his own sales and a
1% override on the sales of his men. In addition, he is granted a
transportation/Representation allowance of P1,000.00 per month. For the
current month, his men made a total sales of P250 000.00. Emmanuel
Joshua made a total sales of P140 000.00. His gross earnings would be:

Gross earnings = Basic pay + Commission +Override +Allowance

= ₱12,500 +3% (₱1400,000) + 1% (₱250,000) + ₱1000
= ₱12,500 + ₱4,200 + ₱2500 + ₱1000
= ₱20,200
 LET’S
PRACTICE
YOUR SKILL!
3. You are planning to buy a house and lot and secure a mortgage
given that the price of the house and lot is P2 400 000.00. The
real estate dealer is asking for a 20% down payment.
a) How much is the down payment?
b) How much would be the amount of the mortgage loan?
Given: Purchase price = ₱2,400,000.00
Down payment % = 20%
a) Down payment = Purchase price × Down payment %
= ₱2,400,000 × 20%
= ₱480,000
b) Mortgage Loan = purchase price – Down payment
= ₱2,400,000 - ₱480,000
= ₱1,920,000
3. You are planning to buy a house and lot and secure a mortgage
given that the price of the house and lot is P2 400 000.00. The
real estate dealer is asking for a 20% down payment.
b) Mortgage Loan = purchase price – Down payment
= ₱2,400,000 - ₱480,000
= ₱1,920,000
Assume that the real state will charge you for 10% monthly and
pay the loan for 3 years.
Assume that the real state will charge you for
10% monthly and pay the loan for 3 years.

=
4. Jan is a sales manager receiving a monthly salary of P18 000.00,
a commission of 5% on his sales, and a monthly transportation
allowance of P5 000.00. He is also given an override of 1% on his
men's sales. For the month of August Jan sold a total of P110
000.00. His men sold a total of P380 500.00. Compute for his gross
earnings.
Gross earning = Basic pay + Commission + Override + Allowance
= ₱18,000 + 5% × ₱110,000 + 1% × ₱380,500 + ₱5,000
= ₱18,000 + ₱5,500 + ₱3,805 + ₱5,000
= ₱32,305
 THANK YOU!
Do you have any question?