Pre Algebra (Period 2 & 4)

Discount & Markups Continued 6-9

(this is similar to finding tax and tip)

MARKUP = the PROFIT you make on an item that you sell

SELLING PRICE = COST + MARKUP


How do you calculate markup?

You MOVE IT, MOVE IT, MULTIPLY!
(Where have we heard that before? :)



Then you ADD the markup to calculate the SELLING PRICE
(the price you want to sell the item for so that you'll make the profit that you want)



EXAMPLE:

You bought a snow board for $200

You've decided to resell it on EBAY so that you can get a better one.

You want to make 25% on what you paid so you can afford a better one.


DECIDE THE MARKUP YOU WANT (the profit):

(markup %)(your cost)
(25%)($200)


MOVE IT, MOVE IT, MULTIPLY:
(.25)($200) = $50 markup

(you could have made the 25% into 1/4 as a fraction)


ADD the MARKUP to the original COST to find the SELLING PRICE:


Markup + Cost = Selling Price

$50 + $200 = $250

YOU CAN DO THIS IN ONE STEP!
After you MOVE IT, MOVE IT, add 1 to the decimal, then MULTIPLY:

In the problem above, add 1 to the .25 = 1.25

Now multiply (1.25)(200) = $250

You got the SELLING PRICE in 1 step!


WHAT IF YOU KNOW THE SELLING PRICE AND THE COST AND YOU WANT TO SEE WHAT THE MARKUP % IS:


MARKUP = a % of INCREASE

MARKUP % = INCREASE FROM COST (markup or profit)/ COST



In the example above, we know the markup % was 25%,

but we should be able to go backwards and prove it:

MARKUP = Selling Price - Cost =
$250 - $200 = $50

MARKUP % = Markup/Cost =
$50/$200 = 1/4 or 25%