At what price (in dollars) should he mark the bike?

Question

John paid $360 for a new mountain bicycle to sell in his shop. He wants to price it so that he can offer a 10% discount and still make 20% profit. At what price (in dollars) should he mark the bike?

Answer 1

Answer: $500.

Start by calculating how much you want to sell the bike for after the discount. To do this, let x represent your price in the equation:

(1 - margin)x = cost

(1 - 0.2)x = 360.

so x = 450.

Then, we repeat the process with the 10% discount we want to allow for

(.9)x = 450

so x = 500