COMMISSION.

398. ILLUSTRATION. One person, A, employs another person, B, to make purchases and sales of goods for him, to collect his bills or transact other business.

For the labor which B thus performs A pays B a percentage on the amount of money he uses in buying, or receives in selling, collecting, or in transacting other business. This percentage is called commission.

Define commission.

399. As B is employed to transact business for another person, B is called an agent.

400. Here the MONEY USED OR RECEIVED is the BASIS, and the COMMISSION is the PERCENTAGE.

Hence the processes already illustrated in percentage apply to operations in Commission.

401. EXAMPLES.

1. An agent bought for me 25 horses at $75 each; his commission being 3% of the price he paid, what was his commission, and what the entire cost of the horses?

2. What is the commission, at 21%, on the purchase of 100 bales of cotton, at $200 per bale; and what is the entire cost? Ans. Com., $500; Cost, $20,500.

3. My agent sold 166 boxes of soap at $3 per box; if he is allowed a commission of 41% on the amount of the sale, what is his commission, and what are the net proceeds?

NOTE. The commission being deducted from the amount of sales, the remainder is the net proceeds.

Ans. Com., $22.41; Proceeds, $475.59.

4. What is the commission on the sale of 2750 lbs. of leather at $.30 per lb., commission 3%; and what are the net proceeds? Ans. Com., $28.87; Proceeds, $796.12.

5. If the rate of commission on the sale of a lot of land was 2%, and the percentage received by an agent for selling was $28, what was the amount of the sale?

NOTE. Here $28

=

18 of the amount of sales. Ans. $1,400.

6. I bought, as an agent, a lot of cloth at $ 5.20 a yard; my percentage of commission being $22.10, and the rate 5%, what was the entire cost of the cloth, and what was the number of yards bought? Ans. $442; 85 yards.

7. A farmer hired a man to cut and haul wood; the man was to receive 20% of the wood cut for his services; if the man delivered to the farmer 320 cords, how many cords were cut? and what percentage did the cutter receive? NOTE. - Here 320 cords is the remainder after the percentage has been deducted. Ans. 400 cds. cut; 80 cds. percentage.

8. My agent sells for me a lot of cheese; after deducting his commission, which was 2% of the amount of sales, the net proceeds were $405.60, what was the amount of sales? Ans. $416.

9. A commission merchant received $4160 with which to purchase carpeting, after deducting his commission of 4% on the money to be expended; what was the sum to be expended, and what was his commission?

NOTE. Here $4160 is an amount, the money to be expended being the basis, which may be considered 100% of itself, and the commission being the percentage, which equals 4% of the basis; therefore, $4160 sum to be expended.

=

104 of the Ans. $4,000; $160.

10. I have sent to my agent at Paris $2295, of which he is to expend what he can in silk after deducting his commission of 2% on the purchase; what sum can he expend, and what is his commission? Ans. $2,250; $45.

11. What part of a remittance of $464.43 will remain to be expended after 23% of the sum to be expended has been deducted? Ans. $452.

12. I send to my agent $4488.75, of which he is to lay out what he can in land at $15 per acre, after his commission of 5% has been deducted; how many acres can he buy, and what is his commission? Ans. 285 acres; $213.75.

402. MISCELLANEOUS EXAMPLES IN COMMISSION.

13. My agent writes me that he has sold, on my account, 10 sets American Encyclopædia, of 21 volumes each, at $ 3.90 per volume; what is his commission at 12% on the sale?

14. Find the net proceeds of the rent of a house for 9 months at $16 per month, after deducting the agent's commission of 8%, and $7.50 for repairs? Ans. $124.98.

15. My agent has sold for me 2000 yards of cloth at 24 cents a yard; he allowed a discount of 5% for cash and deducted his commission of 21% upon his cash receipts; what were my net proceeds? Ans. $444.60.

16. At 15 cents per yard, how many yards of cotton cloth can be bought with the net proceeds of $ 636.30, a commission of 1% upon the net proceeds being allowed for making the purchase? Ans. 4,200 yards.

17. The net proceeds from the sale of a lot of sheeting being $288, after a commission of 4% had been reserved by the agent, what was the number of yards sold at 25 cents a yard? Ans. 1,200 yards.

18. What sum must be sent to an agent that he may purchase 2000 pounds of sugar at 53 cents per pound, and retain his commission of 23% on the purchase? Ans. $110.37.

19. What is the rate per cent of commission when an agent reserves to himself $52.50 of $1552.50, sent him to purchase hay at $20 per ton?

can he purchase?

What number of tons

Ans. 3%; 75 tons.

For Dictation Exercises in Commission, see Key.

STOCKS AND DIVIDENDS, AND BROKERAGE. 403. ILLUSTRATION. Several persons, A, B, and C, associate themselves together for the purpose of manufacturing paper, or for other business purposes.

An association of persons formed for the purpose of transacting business is called a company.

404. A brings into the company $5000, B $7000, and C $10000, to be used in the business of manufacturing. These sums of money are thus invested for future production of other money.

Property invested for future production is capital.

405. A, B, and C employ their capital in manufacturing. Capital employed by a person or a company in business is stock.

406. The stock of the company A, B, and C amounts to $22000. This amount may be divided into 220 equal parts of $100 each.

Each of the equal parts into which stock is divided is a share.

NOTE.

The written statements which A, B, and C have of the number of shares each owns or possesses of the stock employed are called certificates of stock.

407. The owners of stock are called stockholders. Define company; capital; stock; share or shares; stockholders.

408. The gain upon the capital of a company is divided among the stockholders; gain thus divided is called a dividend.

The DIVIDEND is reckoned as a PERCENTAGE, the CAPITAL being the BASIS: hence each stockholder's part of the dividend is the same per cent of his stock that the whole dividend is of the capital.

NOTE I. Stocks may be bought and sold like other property.

NOTE II. When a share of stock will sell at its original value, it is at par; when a share will sell for more than its original value, it is above par, or at a premium; when it sells for less than its original value, it is below par, or at a discount.

409. Persons who buy and sell stock as a business are called stock-brokers.

410. The commission paid to a broker is called brokerage.

The processes already illustrated in percentage apply to Stocks and Dividends, and Brokerage.

411. EXAMPLES.

1. What is the cost of 12 shares of bank stock, original value $100 each, at 6% above par?

NOTE.-$1200, the original value, is the basis of which the amount is required; 106% of $1200 Ans. $1,272.

=

$1272.

2. What cost 20 shares of railroad stock, original value $100 each, at 73% above par? Ans. $2,150.

3. What is the value of 5 shares of the stock of a company for working a silver-mine, the original value being $50 per share, at 8% below par?

NOTE.-$250, the original value, is the basis of which the remainder is required. Ans. $230.

4. What is the brokerage at 4% on the sale of the above stock? Ans. $.575. 5. When gold is at a premium of 263%, what must be paid, in currency, for $ 1200 in gold?

Ans. $1,520.

Gold, at a premium, is bought and sold like other property. J.