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 Question from bob: this is a basic question that I just can't get thru my head. I know all my cost for a product, if I want to sell at a given profit can I divide by a given number, example for 30 % divide by .7 or do I multiply? Is there a simple answer for this? Sure would make my work a lot easier. Thank you for your time Puzzled in Ohio

Bob,

Actually there are two simple answers depending on what you mean by a 30% profit.

Suppose your cost is $100 and you want your profit to be 30% of your cost. Since 30% of your cost is 0.30 ×$100 = $30 you would charge your customer$100 + $30 =$130. To do that in one step it is

$100 × 1.30 =$130.

Again suppose your cost is $100 and you want your profit to be 30% of what your customer pays. If 30$ of what your customer pays is your profit then the remainder, 70%, is your cost. That is

0.70 × (what your customer pays) = $100 and hence what your customer pays is$100/0.70 = \$142.86.

Thus to calculate what to charge your customer multiply your cost by 1.30 if your profit is to be 30% of your cost and divide your cost by 0.70 if your profit to be 30% of what your customer pays.

I hope this helps,
Penny

Math Central is supported by the University of Regina and The Pacific Institute for the Mathematical Sciences.