Question

A store sells pool floats.

• The retail price was a 20% markup over the
manufacturer price.
• A month later, the store reduced the retail price
of the pool float by 12%.

What percent markup is the new retail price over the
manufacturer price?

Answer 1

Explanation:

the original retail price was 120% of the manufacturer price (100% manufacturer price + 20% markup).

now, the whole retail price is reduced by 12%.

that means we have to subtract 12% from the 120%.

but careful, we cannot just do 120-12=108.

that is simply because these 120% are now for this calculation the new basic amount and therefore 100%.

we actually need to calculate and subtract 12% of 120 to get the new percentage over the manufacturer price.

we do this by multiplying 120 by (100-12)/100 = 88/100 = 0.88 :

120 × 0.88 = 105.6%

so, the new retail price is now only 5.6% over the manufacturer price.