Answer: $28,750
Explanation:
Because we know the selling price is equal to the dealer's cost plus the markup we can set up an equation that has the selling price equal to 100% of the dealer's cost plus the 20% markup. Those values total 120% of the dealer's cost. 120% can b written as 1.2, and so we get the following equation.
34,500 = 1.2x, with x = the dealer's cost
This sovles to x = 28,750
We can check this by finding 20% (the markup) of 28,750 (28,750 times 0.2). That tells us we have a markup of $5750. When we add that to $28,750, we get $34,500.