A portrait studio upgrades its lighting equipment. The manufacturer's base price for the l… — Armed Services Vocational Aptitude Battery (ASVAB)

A portrait studio upgrades its lighting equipment. The manufacturer's base price for the lighting kit is $\$2,400.00$ . The regional distributor adds a $25\%$ markup to set the standard retail price. During a promotional event, the studio receives a $12\%$ discount off the standard retail price. What is the final price the studio pays for the lighting kit?

A
$\$2,712.00$
B
$\$2,988.00$
$\$2,640.00$ Answer
D
$\$2,964.00$

Answer

The final price the studio pays for the lighting kit is

\$2,640.00

The correct final price is found by calculating the transactions in sequence. First, a 25% markup on the

2,400.00 base price adds

600.00, creating a retail price of

3,000.00. Then, a 12% discount is applied to that

3,000.00 retail price, which subtracts

360.00, resulting in a final price of

2,640.00.

Step-by-Step Solution

Calculate the retail price by applying the 25% markup to the manufacturer's base price.

\$2,400.00 \times 0.25 = \$600.00

markup.

\$2,400.00 + \$600.00 = \$3,000.00

standard retail price.

The markup is a percentage of the base price and must be added to it to determine the retail price before any discounts can be applied.

Calculate the discount amount by applying the 12% discount to the standard retail price.

\$3,000.00 \times 0.12 = \$360.00

discount.

The promotional discount applies to the current retail price, not the original base price.

Subtract the discount amount from the retail price to find the final price.

\$3,000.00 - \$360.00 = \$2,640.00

The final price is the retail price reduced by the calculated discount amount.

Key Concept

Calculating successive percentage changes requires updating the base value after each step. A discount applied after a markup must be calculated using the newly marked-up price.

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