Definition: A markup or discount is a percent of the original price that is added to or subtracted from it to get a new price.
What are markups and discounts?
Stores raise a wholesale price by a markup percent, and sales lower the price by a discount percent. Tax and tips work the same way.
How do you calculate?
Find the percent of the price, then add or subtract. A scooter costs 140 dollars. A 15 percent discount takes off 0.15 x 140 = 21 dollars, so the sale price is 119 dollars.
What is the one-step method?
Multiply by the remaining fraction. Paying 85 percent of the price is 140 x 0.85 = 119. A 7 percent tax is 140 x 1.07 = 149.80.
What about working backward?
If a sale price of 68 dollars follows a 20 percent discount, the original is 68 / 0.80 = 85 dollars. The sale price is 80 percent of the original, so divide, not multiply.
What is a common mistake?
Stacking discounts by adding them. A 20 percent discount and then 10 percent more is not 30 percent. Compute 0.8 x 0.9 = 0.72, so the total discount is 28 percent.