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 Question from Steve: How do you figure this mark up question: I estimate the cost to build a house for $250,000.00. I mark it up by 20%:$250,000 x 1.20 = $300,000 base price (BP) without sales commission. I want to set the sale price (SP) to include a 6% commission to pay the real estate fee. After the 6 % fee is paid I want to net the$300,000 base price. The formula is basically: $300,000 + 6% of SP = SP. But I can't figure out how to solve for SP. Hi Steve, You have done most of the work to get$300,000 + 6% of SP = SP. 6% of SP is 0.06 × SP and hence you have

$300,000 + 0.06 × SP = SP Now you need to do a little algebra to solve for SP. First subtract 0.06 × SP from both sides to get$300,000 = SP - 0.06 × SP = SP( 1 - 0.06) = 0.94 × SP

Then divide both sides by 0.94 and you find

SP = $300,000/0.94 =$319,148.94

So ask \$320,000 and see what happens.

Penny

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