Quandaries and Queries


How does one figure the percent of increase or decrease in the cost of an item? Been out of school 50 years and have not had to use this type of math and forgot how to do it. This came under the heading of Business Math and I never used it.


Hi Frank

Percentage, and in particular percentage increase or decrease are sometimes confusing because we are not careful in our language, and not everyone means the same thing by percentage increase or percenrage markup.

To be clear, whenever we say percentage we should say percentage of what.

If I am a shopkeeper and buy an item from the distributor for $100.00 and sell it to a customer for $130.00 I have increased the price by $30.00. Since $30.00 is 30% of $100.00, I would say that I have increased the price by 30%. That is, the increase of $30.00 is 30% of what the shopkeeper paid for it.

On the other hand, my customer who bought the item for $130.00, might wonder "What percentage is the $30.00 markup of the $130.00 I paid?"

 30/130 100 = 23

so $30.00 is 23% of $130.00. That is, the increase of $30.00 is 23% of what the customer paid for it.

Thus if I buy an item for $P (purchase price) and sell it for $S (selling price) then the markup is $(S-P). This markup is

 S-P/P 100 percent of the purchase price $P

and it is also

 S-P/S 100 percent of the selling price $S



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