Question

The percent markup on a pickup truck is known to be 252% based on cost to the seller. If the seller paid $15,800 for one, then what would be the corresponding percent markup based on selling price? (round to the nearest tenth of a percent)

Answer 1

Answer:

The markup rate under selling price will be 71.59%

Explanation:

Using markup base on cost the formula is:

sales price = cost x markup percentage + cost

sales price =   COST X 252%  + COST  = 2.52 COST + COST = 3.52 COST

SALES PRICE = 3.52 x COST

Knowing that price is 15,800 the cost is 15,800/3.52 = 4,488.64

Using selling price the formula is:

cost / ( 1 - markup) = Price

Replacing Price with the ammount given in the cost-base markup we got:

4,488.64/(1-markup) = 15,800

now we solve for the markup

1 - 4,488.64/15,800 = markup = 0.7159 = 71.59%