Randy Rental's hired the Friendly collection Agency to collect debts totaling $12,750. The agency collected 70% of the accounts and charged 15% commission for collecting them. What was the amount received by the agency?
What was the amount received by the agency? The alternatives are as follows a. $10,837.50, b. $7,012.50, c. $8,925 and d. $7,586.25
What was the amount received by the agency? The alternatives are as follows a. $10,837.50, b. $7,012.50, c. $8,925 and d. $7,586.25
1 Answer
See a solution process below:
Explanation:
First, to see how much of the debt the agency collected we must find what is 70% of $12,750.
"Percent" or "%" means "out of 100" or "per 100", Therefore 70% can be written as
When dealing with percents the word "of" means "times" or "to multiply".
Finally, lets call the amount of collections we are looking for "c".
Putting this altogether we can write this equation and solve for
Next, we need to subtract the agency's commission from the debt collected. So, to find the commission we need to find 15% of $8,925.
Using the same formula as above to find the commission gives:
Subtracting the commission from the debt collected gives:
The Agency:
- Collected $8,925.00 from debtors
- Took $1,338.75 in commissions
- Gave Randy Rentals back $7,586.25
