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Difficulty: MediumPercentage Change, Markups, and Discounts

A culinary school is purchasing a set of commercial stand mixers. The wholesale cost of the equipment is $1,500.00\$1,500.00. A restaurant supply store applies a 30%30\% markup to the wholesale cost to determine the regular retail price. To support the culinary program, the store then applies a 15%15\% educational discount to this regular retail price. What is the final price the school pays for the mixers before any applicable taxes?

  1. $1,657.50\$1,657.50Answer
  2. B
    $1,725.00\$1,725.00
  3. C
    $292.50\$292.50
  4. D
    $1,935.00\$1,935.00

Answer

$1,657.50\$1,657.50
To solve this problem, first determine the retail price by calculating the 30%30\% markup on the $1,500.00\$1,500.00 wholesale cost. The markup is $450.00\$450.00, making the retail price $1,950.00\$1,950.00. Then, calculate the 15%15\% educational discount based on this new retail price. The discount is $292.50\$292.50 (0.15×$1,950.000.15 \times \$1,950.00). Subtracting this discount from the retail price gives a final cost of $1,657.50\$1,657.50.

Step-by-Step Solution

1
Calculate the markup amount by finding 30%30\% of the wholesale cost.
$1,500.00×0.30=$450.00\$1,500.00 \times 0.30 = \$450.00
The store increases the wholesale price by 30%30\% to determine its retail price.
2
Add the markup amount to the original wholesale cost to find the regular retail price.
$1,500.00+$450.00=$1,950.00\$1,500.00 + \$450.00 = \$1,950.00
The retail price is the sum of the wholesale cost and the markup.
3
Calculate the discount amount by finding 15%15\% of the regular retail price.
$1,950.00×0.15=$292.50\$1,950.00 \times 0.15 = \$292.50
The educational discount is applied to the store's regular retail price, not the wholesale price.
4
Subtract the discount amount from the retail price to find the final price.
$1,950.00−$292.50=$1,657.50\$1,950.00 - \$292.50 = \$1,657.50
The final amount paid is the retail price minus the calculated discount.

Key Concept

Successive Percentage Changes (Markup followed by Discount)
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Topics

Percentage Change, Markups, and Discounts

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