Question

An item costing `$125` was marked up by `30%` of the selling price. During a sale, the item was reduced to `$120`. What was the rate of markdown during the sale?

Answer 1

Approximately `26%`

Explanation:

.

Let's let the marked up price `=x`.

`x=$125(1.3)=$162.5`

The rate of markdown would be:

`($162.5-$120)/($162.5)=0.261538`

which is approximately `26%`.

Answer 2

If a `$125` item was marked up by `30%` from its selling price, then `30%` of `$125` was added to its selling price.

`$125.00 + 0.30 cdot $125.00 = $162.50`

If it was put on sale for `$120.00`, then it was marked down by:

`($162.50 - $120.00)/($162.50) xx 100% = 26.2%`

So the amount of decrease in price divided by the original price is going to give the relative drop in price.