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 Question from Andrea: if a product cost $2.00 and it is marked up to$6.00 this would be a 200% increase. (4/2 x100) = 200%. this is easy to compute.......but when you compute 2 x 200% it is 4. this works if you only go up to 100% like $2 to$4 is 100% either way you compute it. Why does it only work up to 100% Thanks Andrea

Hi Andrea,

I think I see what is bothering you.

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

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