Markup:
When you mark up the price of an item, you’re increasing its original price by a certain percentage.
Let’s say the original price of a bike is $100, and you want to mark it up by 50%.
To calculate the selling price after the markup:
Convert the percentage to a decimal: 50% = 0.5
Add 1 to the decimal: 1 + 0.5 = 1.5
Multiply the original price by this factor: Selling price = 1.5 * $100 = $150.
Markdown:
When you mark down the price of an item, you’re reducing its original price by a certain percentage.
Using the same bike example, let’s mark it down by 50%:
Convert the percentage to a decimal: 50% = 0.5
Subtract the decimal from 1: 1 - 0.5 = 0.5
Multiply the original price by this factor: Selling price = 0.5 * $100 = $50.
When you markup, you are selling for more than the actual price, so profit, when you markdown you are selling for less than the original price so loss.
