Question

A music store marks up the instruments it sells by 40%. If the store bought a guitar for $35, what will be its store price? If the price tag on a trumpet says $104, how much did the store pay for it? If the store paid $75 for a clarinet and sold it for $100, did the store mark up the price by 40%?

Answer 1

a. $49

b. $74.28

c. No

Explanation:

The computation is shown below:

a. The store price is

= Purchase price + markup

= $35 + $35 × 40%

= $35 + $14

= $49

b. The price paid is

Since there is a markup of 40% and when it is added to 100% of cost so the selling price is 140% of the cost or 1.40 of the cost

Now the price paid is

$104 = 1.40 × cost

So, the cost is

= $104 ÷ 1.40

= $74.28

c. Now the markup is

= $100 - $75

= $25

The markup percentage is

= $25 ÷ $75

= 33.33%

No the store does not markup the price by 40%