Final answer:
To find the retail markup rate, calculate the difference between the retail and wholesale prices, divide that by the wholesale price, and multiply by 100. In this scenario, the markup rate is 87.5%.
Step-by-step explanation:
The student is asking about the retail markup rate of a golf club in a scenario where a golf pro shop pays its wholesaler $40 for the club and sells that club to golfers for $75. To calculate the retail markup, you subtract the wholesale price from the retail price and then divide that number by the wholesale price. Finally, to express it as a percentage, you multiply by 100.
Here's the calculation:
Retail Markup = ((Retail Price - Wholesale Price) / Wholesale Price) × 100
In this case, it would be:
Retail Markup = (($75 - $40) / $40) × 100
Retail Markup = ($35 / $40) × 100
Retail Markup = 0.875 × 100
Retail Markup = 87.5%
Therefore, the retail markup rate is 87.5%.