Hi Andrea,

I think I see what is bothering you.

Here is your first example.

Original price $2.00, markup amount $4.00, final price $6.00

Percentage increase

[(markup amount)/(original price)] × 100 = [$4.00/$2.00] × 100 = 200%

(original price) × (percentage markup) = $2.00 × 200% = $4.00

Now your second example.

Original price $2.00, markup amount $2.00, final price $4.00

Percentage increase

[(markup amount)/(original price)] × 100 = [$2.00/$2.00] × 100 = 100%

(original price) × (percentage markup) = $2.00 × 100% = $2.00

Another example.

Original price $3.00, markup amount $3.00, final price $6.00

Percentage increase

[(markup amount)

I hope this helps,
Penny/(original price)] × 100 = [$3.00/$3.00] × 100 = 100%

(original price) × (percentage markup) = $3.00 × 100% = $3.00

The original price times the percentage markup is the markup amount. I think the confusion arises when the markup is 100% for in that case the markup amount and the original price are the same dollar amount.

I hope this helps,
Penny

Andrea wrote back

Penny,

Thanks from your help.  The business I work at is having a problem with one area.

We bought a product for 4.59 and sold it at 12.97.  When i use your computation this comes out to a 183% increase.....is this right....my coworkers are saying it is 283%........they are doing 12.97/4.59 x100 and getting 283.....if you look at 4.59 to 12.97 it does look like it increases about 3 times considering 4x3 is 1200.  Thanks

Hi Andrea,

You are correct when you say that your selling price of $12.97 is 283% of the price you bought it for, $4.59 but the term percentage markup refers to the markup, which is $12.97 - $4.59 = $8.38, as a percentage of your buying price. You use the word increase and this again is the amount $8.38 and so there is a 183% increase or said another way "the increase is 183% of your buying price". Your coworkers are looking at the final price and saying that the final price is 283% of your buying price which is also correct but the increase is only 183% of your buying price.

To look at another example if you bought something for $1.00 and sold it for $2.00 then this is a 100% increase. You might say the price has doubled (200%) but the increase is 100% of your buying price.

I hope this helps,
Penny