What is the correct way to calculate a salesperson's monthly compensation based on a 5% commission of $65,000 in sales?

To calculate a salesperson's monthly compensation based on a 5% commission from $65,000 in sales, you begin by determining the total commission amount. The formula for calculating commission is:

Commission = Sales Amount × Commission Rate

In this case, the sales amount is $65,000, and the commission rate is 5%, expressed as 0.05 in decimal form.

So, the calculation would be:

Commission = $65,000 × 0.05 = $3,250

This means that if a salesperson generates $65,000 in sales, they earn a commission of $3,250 for the month. This amount reflects the correct answer, effectively capturing the commission rate applied to the total sales made.