The graphic artist receives 5% amount of the total sales as his royalty payment. The 3% from this royalty payment goes to his agent and remaining 97% are with the artist. So first we calculate the initial 5% amount the graphic artist will recieve, which will be:
[tex]0.05(2,000,000)= 100,000[/tex]
$100,000 is the total royalty payment the graphic artist will receive. From this amount 3% goes to agent and 97% goes with artist. So the actual amount graphic artist will earn will be:
[tex]0.97(100,000) = 97,000[/tex]
Thus, the graphic artist earns $97,000
