Question

At an appliance store, the price of a refrigerator is marked up 25% to $406.25.

What was the price of the refrigerator before the markup?

Enter your answer in the box.

$

Answer 1

325 = original price

Explanation:

New price = original price + markup

Markup = original price * markup rate

Substituting this into the first equation

New price = original price + original price * markup rate

Factor out the original price

New price = original price (1+ markup rate)

We know the new price = 406.25 and the markup rate = 25% = .25 in decimal form. Putting these into the equation

406.25 = original price (1+.25)

406.25 = original price (1.25)

Divide each side by 1.25

406.25 /1.25 = original price/1.25

325 = original price