Markup and Discount

Markup and Discount

Lesson 6-9

Markup and Discount  When a store sells merchandise, it sells

the items for more than it cost the store to buy the items. This is how a profit is made. The amount of increase is called the markup.  Sometimes a store sells items at a sale price. The amount that the item decreases in price is called the discount.

Markup  Suppose UBS buys a skateboard from a supplier for

$75. If UBS marks the price up 20% in order to make a profit, how much will they sell the skateboard for?  $75 x 20% = amount of markup.  75 x 0.2 = 15  The skateboard is marked up $15. We add that amount

 To the original price to get a total of $90.00. The

skateboard will sell for $90.00

Try This  A clothing store pays $56 for a jacket.

The store marks it up 75%. Find the amount of the markup.

Try This  A clothing store pays $56 for a jacket.

The store marks it up 75%. Find the amount of the markup. $42

Try This  A store pays $5 for a baseball cap. The

percent of markup is 70%. Find the selling price of the cap.

Try This  A store pays $5 for a baseball cap. The

percent of markup is 70%. Find the selling price of the cap. $8.50

Discount  The procedure for finding discount is the

same as finding markup. Simply multiply the price by the percent after it has been changed to a decimal.  Example: A store normally sells DVDs for $15.00. They are on sale for a 10% discount. Multiply $15 by 0.1. The amount of discount is $1.50

Discount  To find the final sale price, remember

with a markup we added the amount of markup to the purchase price. To find the sale price of a discounted item, we subtract the discount amount from the original price.  In our DVD example we subtract the $1.50 discount from the original price of $15.00. $15.00 - $1.50 = $13.50.

Try This  A car that originally is priced at $12,000

is on sale for a 20% discount. Find the amount of the discount.

Try This  A car that originally is priced at $12,000

is on sale for a 20% discount. Find the amount of the discount. $2,400

Try This  A car that originally is priced at $12,000

is on sale for a 20% discount. Find the amount of the discount. $2,400  Now calculate the final sales price.

Try This  A car that originally is priced at $12,000

is on sale for a 20% discount. Find the amount of the discount. $2,400  Now calculate the final sales price.

$9,600

Another method  To calculate the sale price after a

discount we learned to find the amount of the discount and then subtract it from the original amount. There is another way.

Another method  Suppose the car that was $12,000 and is now on sale

for a 20% discount is still there.  We could say that we are saving 20%, but another way to look at the problem is that we need to pay 80%.  80% of $12,000 is the sale price.  0.80 x 12,000 = $9,600