The Correct Answer and Explanation is:
Based on the information provided, the correct way to calculate the total pay for last year is:
($2,000 * 12) + (0.1 * $300,000)
To determine the total pay for the year, you must combine the two main components of compensation: the annual base salary and the annual bonus.
First, let’s calculate the annual base salary. The problem states the base salary is
2,000permonth.Sincethereare12monthsinayear,youneedtomultiplythemonthlysalaryby12.Thispartofthecalculationisrepresentedbytheexpression(2,000permonth.Sincethereare12monthsinayear,youneedtomultiplythemonthlysalaryby12.Thispartofthecalculationisrepresentedbytheexpression(2,000 * 12). This gives you the total amount earned from salary alone over the entire year.
Next, you need to calculate the annual bonus. The bonus is 10% of the annual sales. The annual sales figure for last year was $300,000. To find the bonus amount, you must calculate 10 percent of this total. In decimal form, 10% is written as 0.1. Therefore, the bonus calculation is represented by the expression (0.1 * $300,000).
Finally, to find the total pay for the year, you must add the annual base salary and the annual bonus together. Combining the two calculations gives you the complete formula: ($2,000 * 12) + (0.1 * $300,000).
The other options are incorrect. One option only calculates the bonus, while another only calculates the annual salary. A different option incorrectly adds just one month’s salary to the bonus. Another option uses an incorrect decimal for the percentage, calculating a 1% bonus instead of the stated 10% bonus. The correct choice accurately reflects both parts of the annual income and adds them together for a final total.
