the goods, over which he is bound to exercise a reasonable amount of care while they are in his possession. An agent is a person authorized to transact business for another, who is called the principal. A broker negotiates sales of property, but, as a rule, never has possession of it. A collector is one employed to collect debts. All of the people named here, except a principal, work, in most cases, on commission. After they have been paid, what is left is called the net proceeds. NOTE. Children should understand clearly all terms connected with this work. Most difficulties in such subjects arise from inadequate understanding of terms used. Principles: 1. The commission is some number of per cent of the price of what is bought or sold. 2. The proceeds equal the selling price minus the commission. 3. The amount equals the selling price plus the commission. Commission presents two classes of problems. One of these classes may be called "buying problems." The other may be called "selling problems." PROBLEM: BUYING PROBLEMS. I sent my agent $1977.60 to buy wild farm lands in northern Wisconsin, at $3 per acre. He was to receive 3% for his work. How many acres did he buy? NOTE. The point to be made clear to the pupil here is that each time the agent paid out $1 for the land, he took out 3% of that amount, or 39, for himself. For each acre he took out $3 to pay for the land and 9 as his commission, or in all $3.09 for each acre. For $1977.60, he buys as many acres as $3.09 is contained times in $1977.60, or 640. Hence, he buys 640 acres. PROBLEM: How many barrels of flour can an agent buy with $828.75, if flour is worth $3.25 a barrel and his commission is 2% ? WORK AND EXPLANATION: Commission on each barrel is 2% of $3.25 = $.065. Cost of each barrel to principal is $3.25 + $.065 = $3.315. Agent buys as many barrels as $3.315 is contained times in $828.75, or 250. PROBLEM:. SELLING PROBLEMS. I sell 40 cows at $40 each on a commission of 10%. What is my commission? What does my principal receive? WORK AND EXPLANATION: Cows sell for 40 x $40, or $1600. = My commission 10% of $1600, or $160. PROBLEM: A real estate agent sold land so that his commission at 5% was $140. What did the land sell for? What did the principal receive? = 1% of selling price of $140, or $28. PROBLEM: My agent sells 360 lb. of butter for me at 20. He pays $4.20 freight charges and $9.60 for storage. What does he send me ? His commission is 5%. A real estate agent wrote his principal: “I have sold 200 acres of your land at 30% advance on its cost." What did he get for it, if the cost was $10 per acre? WORK AND EXPLANATION: The cost was 200 × $10 = $2000 Selling price was $2600. OR Selling price = 130% of cost, or $2600. NOTE. In this problem you may find the selling price of one acre, and work to the whole from that, as, Selling price of 1 A. 100% of $10+30% of $10, or 130% of $10. 130% of $10 = $13.00. Selling price of 200 A. = 200 × $13, or $2600. PROBLEM: If, in the preceding problem, the agent receives a commission of 5% on the first $1000 and 3% on the rest of the sale, what would his whole commis sion be? A. H.-20 WORK AND EXPLANATION: He receives 5% commission on $1000 His total commission is = $50 $48 $98 TRADE DISCOUNT. This is sometimes called commercial discount. When the large dealers send out prices to the smaller business houses, they usually quote their retail prices. Then they offer the small dealer a net price by giving so many per cent off, as "50% off," or, "20 and 10 off." The prices sent in the first way are called list prices. After the discount has been taken out, the amount left is called the net price. From this, we may say that trade discount is a reduction from the list price of an article, from a bill of goods, or from a debt. The amount of the discount sometimes depends on the size of the order, sometimes on the terms of payment. Two or more discounts are often quoted. The first is a discount off the list price; the second is a discount on what is left when the first discount has been made; the third is a discount on what is left, etc. PROBLEMS. PROBLEM: off. I receive a bill of goods amounting to $100, 20 NOTE.- Observe that where two or more discounts are given, the base changes with each successive discount. For that reason, the discounts cannot be added and taken out at once. must be taken by itself. PROBLEM: Each A thresher is sent to a farmer with a bill quoting " and 10% off" for cash. What should he pay, if NOTE. Any bright pupil will be able to work such problems orally. The actual work for such a problem may be written like this : The Wanamaker Method. This plan is followed in the Wanamaker stores. It is most convenient and practical. The plan is to find what per cent of the whole will be left when the discounts are taken out, and from that to find the actual amount. |