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 Post subject: help with a math question
PostPosted: Thu Nov 19, 2015 12:27 pm 
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how is this not $36?


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 Post subject: Re: help with a math question
PostPosted: Thu Nov 19, 2015 12:31 pm 
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It seems this is a finance question more than a math question. It appears the explanation is the definition of markup.

So to calculate markup, you divide the cost by 1 minus the percentage.

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 Post subject: Re: help with a math question
PostPosted: Thu Nov 19, 2015 12:49 pm 
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 Post subject: Re: help with a math question
PostPosted: Thu Nov 19, 2015 12:56 pm 
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Last edited by aelle on Thu Nov 19, 2015 12:58 pm, edited 1 time in total.

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 Post subject: Re: help with a math question
PostPosted: Thu Nov 19, 2015 12:57 pm 
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Drunk Dialed Ian MacKaye
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fupapack wrote:
[/img]
how is this not $36?


They want a 20% markup at retail. If retail price were $36, the markup ($6) would only be 16.7% of $36 (6/36 = 0.1666...)

To calculate retail price, you divide the purchase price by (1-markup).

Proof:

Let x be the retail price. The markup is 20% of x, or 0.2*x
x = 30 + 0.2*x
x - 0.2*x = 30

You factorize:
(1 - 0.2)x = 30
x = 30/(1 - 0.2)
x = 37.5

Does it make sense?


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 Post subject: Re: help with a math question
PostPosted: Thu Nov 19, 2015 1:04 pm 
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Invented Vegan Meringue
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Location: mt. pleasant
aelle wrote:
fupapack wrote:
[/img]
how is this not $36?


They want a 20% markup at retail. If retail price were $36, the markup ($6) would only be 16.7% of $36 (6/36 = 0.1666...)

To calculate retail price, you divide the purchase price by (1-markup).

Proof:

Let x be the retail price. The markup is 20% of x, or 0.2*x
x = 30 + 0.2*x
x - 0.2*x = 30

You factorize:
(1 - 0.2)x = 30
x = 30/(1 - 0.2)
x = 37.5

Does it make sense?

Yes thank you so much!!


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 Post subject: Re: help with a math question
PostPosted: Thu Nov 19, 2015 5:07 pm 
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I did not know the definition of mark up; I would have said 120% of 30 = 1.2 * 30 = 36. So sell at $36.

It was so fun reading through Aelle's explanation because I haven't done any of that sort of maths for so long, but at each step my brain was like ...uh... oh yeah! and it clicked again. I should get some old textbooks and past papers and re-learn high school maths sometime.

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 Post subject: Re: help with a math question
PostPosted: Thu Nov 19, 2015 5:18 pm 
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Huh. I set prices pretty often in my job and I never use the correct formula. I always do cost x 1.2 (or whatever). Then again there are a lot of other factors involved (like whether I think a customer would really want to pay a given price), so I rarely end up pricing things at full markup.

This was interesting. Thanks for the walkthrough on the math.


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