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Question

The markup on a video game is 25% of the sale price. If the video game sells for $66.67, what was the cost (in $)? (Round your answer to the nearest cent.

Answer 1

The simple formula for markup is:

Sales Price - Cost = Markup.

Since the markup is 25% of the SP, that would indicate that the the markup value is .25 times $66.67. This would result in $16.67 (rounded) as the markup values.

To get to the cost, you would use the formula highlighted.

SP (66.67) - Cost = 16.67

Subtract 66.67 from 16.67 to get -50. Drop the negative as both sides of the equation are negative. Your answer for the cost is $50.