Question

A person insures ${\rm{Rs}}.\;26000$ through an insurance agent. If the agent gets
$Rs.650$ as the commission, find the rate of commission.

Answer 1

Hint: In this problem, first we need to find the rate of commission received by the agent. Since
the total insured amount and the amount of commission are given. So we have to divide the
commission amount by the total insured amount. From that we get the rate of commission. After
that we have to multiply that rate with 100 to get the percentage of rate of commission received
by the agent.

It is given that the person insures total amount of ${\rm{Rs}}.\;26000$.
Commission amount for the agent is ${\rm{Rs}}.\;650$.
It is known that the rate of a substance is the quantity or fraction against the total amount.
Now, we have to find the rate of commission. Thus, we need to divide the amount of commission
for the agent with the total insured amount.
Rate of commission
 $\begin{array}{c} =
\dfrac{{{\rm{Rs}}.\;650}}{{{\rm{Rs}}{\rm{.}}\;26000}}\\ = \dfrac{1}{{40}}\end{array}$

Converting $\dfrac{1}{{40}}$ into percentage, we need to multiply the rate of commission with
100.
Percentage of the rate of commission
$\begin{array}{c} = \dfrac{1}{{40}} \times 100\\ =
\dfrac{{100}}{{40}}\% \\ = 2.5\% \end{array}$

Hence, the percentage of the rate of commission that the agent received is 2.5%.

Note: Make sure to consider the appropriate value of the insured amount and commission and after finding the ratio, do not forget to multiply the ratio with 100 to get the rate of commission.