Math CentralQuandaries & Queries


Question from Arron:

I have the retail price of $45.50. This price reflects a gross profit margin of 47%. How do I calculate the original cost of the item?

Hi Arron,

If the profit margin is $47\%$ then the profit is 47% of the price the retail customer pays for the item. Thus the profit margin is $47\%$ of $\$45.50.$ Hence you can calculate the profit margin by $0.47 \times \$45.50$ and then subtract this from $\$45.50$ to find the original cost.


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