{"id":3316,"date":"2023-05-23T19:22:22","date_gmt":"2023-05-23T19:22:22","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/?post_type=chapter&#038;p=3316"},"modified":"2024-10-18T20:55:08","modified_gmt":"2024-10-18T20:55:08","slug":"personal-finance-background-youll-need-2","status":"web-only","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/chapter\/personal-finance-background-youll-need-2\/","title":{"raw":"Personal Finance: Background You'll Need 2","rendered":"Personal Finance: Background You&#8217;ll Need 2"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Calculate mark up of a product&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:4225,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;15&quot;:&quot;Calibri&quot;}\">Calculate mark up of a product<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<h2>Calculating Mark-up<\/h2>\r\n<p>Applications of mark-up are very common in retail settings. The price a retailer pays for an item is called the [pb_glossary id=\"13081\"]wholesale price[\/pb_glossary]. The retailer then adds a <strong>mark-up<\/strong> to the wholesale price to get the <strong>list price<\/strong>, the price he sells the item for. The mark-up is usually calculated as a percent of the wholesale price. The percent is called the <strong>mark-up rate<\/strong>. To determine the amount of mark-up, multiply the mark-up rate by the wholesale price.<\/p>\r\n<section class=\"textbox keyTakeaway\">\r\n<div>\r\n<h3>mark-up<\/h3>\r\n<p>The mark-up is the amount added to the wholesale price.<\/p>\r\n<p>&nbsp;<\/p>\r\n<center>[latex]\\begin{array}{ccc}\\hfill \\text{amount of mark-up}&amp; =&amp; \\text{mark-up rate}\\cdot \\text{wholesale price}\\hfill \\\\ \\hfill \\text{list price}&amp; =&amp; \\text{wholesale price}+\\text{mark up}\\hfill \\end{array}[\/latex]<\/center>\r\n<p>&nbsp;<\/p>\r\n\r\nThe list price should always be more than the wholesale price.<\/div>\r\n<\/section>\r\n<section class=\"textbox questionHelp\">\r\n<p><strong>How To: Calculate List Price from Wholesale Price and Mark-Up<\/strong><\/p>\r\n<ol>\r\n\t<li><strong>Understand the Terms<\/strong>\r\n<ol style=\"list-style-type: lower-alpha;\">\r\n\t<li><strong>Wholesale Price<\/strong>: The initial cost of the item before any mark-up.<\/li>\r\n\t<li><strong>Mark-Up Rate<\/strong>: The percentage the wholesale price is increased by to determine the list price.<\/li>\r\n\t<li><strong>Amount of Mark-Up<\/strong>: The actual dollar amount that the wholesale price is increased by.<\/li>\r\n\t<li><strong>List Price<\/strong>: The final price of the item after the mark-up is applied.<\/li>\r\n<\/ol>\r\n<\/li>\r\n\t<li><strong> Calculate the Amount of Mark-Up: <\/strong>Convert the mark-up rate from a percentage to a decimal by dividing by [latex]100[\/latex]. Multiply the wholesale price by the decimal mark-up rate.<\/li>\r\n\t<li><strong> Calculate the List Price:<\/strong> Add the amount of mark-up to the wholesale price.<\/li>\r\n<\/ol>\r\n<\/section>\r\n<section class=\"textbox example\">Adam's art gallery bought a photograph at the wholesale price of [latex]\\text{\\$250}[\/latex]. Adam marked the price up [latex]\\text{40%}[\/latex].\r\n\r\n<ol>\r\n\t<li>Find the amount of mark-up.<\/li>\r\n\t<li>Find the list price of the photograph.<\/li>\r\n<\/ol>\r\n<p>[reveal-answer q=\"168591\"]Show Answer[\/reveal-answer]<br \/>\r\n[hidden-answer a=\"168591\"]<\/p>\r\n<ol>\r\n\t<li>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>Identify what you are asked to find.<\/td>\r\n<td>What is the amount of mark-up?<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Choose a variable to represent it.<\/td>\r\n<td>Let [latex]m=[\/latex] the amount of each mark-up.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Write a sentence that gives the information to find it.<\/td>\r\n<td>The mark-up is [latex]40\\text{%}[\/latex] of the wholesale price.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Translate into an equation.<\/td>\r\n<td><img src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/277\/2017\/04\/24222110\/CNX_BMath_Figure_06_03_023_img-01.png\" alt=\".\" \/><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Simplify.<\/td>\r\n<td>[latex]m=100[\/latex]<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Check if this answer is reasonable.<\/td>\r\n<td>Yes. The markup rate is less than [latex]50\\text{%}[\/latex] and [latex]\\text{\\$100}[\/latex] is less than half of [latex]\\text{\\$250}[\/latex].<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Write a complete sentence that answers the question.<\/td>\r\n<td>The mark-up on the photograph was [latex]\\text{\\$100}[\/latex].<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/li>\r\n\t<li>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>Identify what you are asked to find.<\/td>\r\n<td>What is the list price?<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Choose a variable to represent it.<\/td>\r\n<td>Let [latex]p=[\/latex] the list price.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Write a sentence that gives the information to find it.<\/td>\r\n<td>The list price is the wholesale price plus the mark-up.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Translate into an equation.<\/td>\r\n<td><img src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/277\/2017\/04\/24222114\/CNX_BMath_Figure_06_03_024_img-01.png\" alt=\".\" \/><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Simplify.<\/td>\r\n<td>[latex]p=350[\/latex]<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Check if this answer is reasonable.<\/td>\r\n<td>Yes. The list price, [latex]\\text{\\$350}[\/latex], is more than the wholesale price, [latex]\\text{\\$250}[\/latex].<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Write a complete sentence that answers the question.<\/td>\r\n<td>The list price of the photograph was [latex]\\text{\\$350}[\/latex].<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/li>\r\n<\/ol>\r\n<p>[\/hidden-answer]<\/p>\r\n<\/section>\r\n<section class=\"textbox tryIt\">[ohm2_question hide_question_numbers=1]6905[\/ohm2_question]<\/section>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Calculate mark up of a product&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:4225,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;15&quot;:&quot;Calibri&quot;}\">Calculate mark up of a product<\/span><\/li>\n<\/ul>\n<\/section>\n<h2>Calculating Mark-up<\/h2>\n<p>Applications of mark-up are very common in retail settings. The price a retailer pays for an item is called the <a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_3316_13081\">wholesale price<\/a>. The retailer then adds a <strong>mark-up<\/strong> to the wholesale price to get the <strong>list price<\/strong>, the price he sells the item for. The mark-up is usually calculated as a percent of the wholesale price. The percent is called the <strong>mark-up rate<\/strong>. To determine the amount of mark-up, multiply the mark-up rate by the wholesale price.<\/p>\n<section class=\"textbox keyTakeaway\">\n<div>\n<h3>mark-up<\/h3>\n<p>The mark-up is the amount added to the wholesale price.<\/p>\n<p>&nbsp;<\/p>\n<div style=\"text-align: center;\">[latex]\\begin{array}{ccc}\\hfill \\text{amount of mark-up}& =& \\text{mark-up rate}\\cdot \\text{wholesale price}\\hfill \\\\ \\hfill \\text{list price}& =& \\text{wholesale price}+\\text{mark up}\\hfill \\end{array}[\/latex]<\/div>\n<p>&nbsp;<\/p>\n<p>The list price should always be more than the wholesale price.<\/p><\/div>\n<\/section>\n<section class=\"textbox questionHelp\">\n<p><strong>How To: Calculate List Price from Wholesale Price and Mark-Up<\/strong><\/p>\n<ol>\n<li><strong>Understand the Terms<\/strong>\n<ol style=\"list-style-type: lower-alpha;\">\n<li><strong>Wholesale Price<\/strong>: The initial cost of the item before any mark-up.<\/li>\n<li><strong>Mark-Up Rate<\/strong>: The percentage the wholesale price is increased by to determine the list price.<\/li>\n<li><strong>Amount of Mark-Up<\/strong>: The actual dollar amount that the wholesale price is increased by.<\/li>\n<li><strong>List Price<\/strong>: The final price of the item after the mark-up is applied.<\/li>\n<\/ol>\n<\/li>\n<li><strong> Calculate the Amount of Mark-Up: <\/strong>Convert the mark-up rate from a percentage to a decimal by dividing by [latex]100[\/latex]. Multiply the wholesale price by the decimal mark-up rate.<\/li>\n<li><strong> Calculate the List Price:<\/strong> Add the amount of mark-up to the wholesale price.<\/li>\n<\/ol>\n<\/section>\n<section class=\"textbox example\">Adam&#8217;s art gallery bought a photograph at the wholesale price of [latex]\\text{\\$250}[\/latex]. Adam marked the price up [latex]\\text{40%}[\/latex].<\/p>\n<ol>\n<li>Find the amount of mark-up.<\/li>\n<li>Find the list price of the photograph.<\/li>\n<\/ol>\n<p><div class=\"qa-wrapper\" style=\"display: block\"><button class=\"show-answer show-answer-button collapsed\" data-target=\"q168591\">Show Answer<\/button><\/p>\n<div id=\"q168591\" class=\"hidden-answer\" style=\"display: none\">\n<ol>\n<li>\n<table>\n<tbody>\n<tr>\n<td>Identify what you are asked to find.<\/td>\n<td>What is the amount of mark-up?<\/td>\n<\/tr>\n<tr>\n<td>Choose a variable to represent it.<\/td>\n<td>Let [latex]m=[\/latex] the amount of each mark-up.<\/td>\n<\/tr>\n<tr>\n<td>Write a sentence that gives the information to find it.<\/td>\n<td>The mark-up is [latex]40\\text{%}[\/latex] of the wholesale price.<\/td>\n<\/tr>\n<tr>\n<td>Translate into an equation.<\/td>\n<td><img decoding=\"async\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/277\/2017\/04\/24222110\/CNX_BMath_Figure_06_03_023_img-01.png\" alt=\".\" \/><\/td>\n<\/tr>\n<tr>\n<td>Simplify.<\/td>\n<td>[latex]m=100[\/latex]<\/td>\n<\/tr>\n<tr>\n<td>Check if this answer is reasonable.<\/td>\n<td>Yes. The markup rate is less than [latex]50\\text{%}[\/latex] and [latex]\\text{\\$100}[\/latex] is less than half of [latex]\\text{\\$250}[\/latex].<\/td>\n<\/tr>\n<tr>\n<td>Write a complete sentence that answers the question.<\/td>\n<td>The mark-up on the photograph was [latex]\\text{\\$100}[\/latex].<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/li>\n<li>\n<table>\n<tbody>\n<tr>\n<td>Identify what you are asked to find.<\/td>\n<td>What is the list price?<\/td>\n<\/tr>\n<tr>\n<td>Choose a variable to represent it.<\/td>\n<td>Let [latex]p=[\/latex] the list price.<\/td>\n<\/tr>\n<tr>\n<td>Write a sentence that gives the information to find it.<\/td>\n<td>The list price is the wholesale price plus the mark-up.<\/td>\n<\/tr>\n<tr>\n<td>Translate into an equation.<\/td>\n<td><img decoding=\"async\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/277\/2017\/04\/24222114\/CNX_BMath_Figure_06_03_024_img-01.png\" alt=\".\" \/><\/td>\n<\/tr>\n<tr>\n<td>Simplify.<\/td>\n<td>[latex]p=350[\/latex]<\/td>\n<\/tr>\n<tr>\n<td>Check if this answer is reasonable.<\/td>\n<td>Yes. The list price, [latex]\\text{\\$350}[\/latex], is more than the wholesale price, [latex]\\text{\\$250}[\/latex].<\/td>\n<\/tr>\n<tr>\n<td>Write a complete sentence that answers the question.<\/td>\n<td>The list price of the photograph was [latex]\\text{\\$350}[\/latex].<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/li>\n<\/ol>\n<\/div>\n<\/div>\n<\/section>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm6905\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=6905&theme=lumen&iframe_resize_id=ohm6905&source=tnh\" width=\"100%\" height=\"150\"><\/iframe><\/section>\n<div class=\"glossary\"><span class=\"screen-reader-text\" id=\"definition\">definition<\/span><template id=\"term_3316_13081\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_3316_13081\"><div tabindex=\"-1\"><p>The wholesale price refers to the cost of a good sold in bulk by the manufacturer or distributor to a retailer, rather than the cost at which the retailer will sell the good to the public. This price is typically lower than the retail price, as it does not include the retailer's markup for profit. <\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><\/div>","protected":false},"author":16,"menu_order":3,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc-attribution\",\"description\":\"Prealgebra\",\"author\":\"\",\"organization\":\"OpenStax\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"Download for free at http:\/\/cnx.org\/contents\/caa57dab-41c7-455e-bd6f-f443cda5519c@9.757\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":89,"module-header":"background_you_need","content_attributions":[{"type":"cc-attribution","description":"Prealgebra","author":"","organization":"OpenStax","url":"","project":"","license":"cc-by","license_terms":"Download for free at http:\/\/cnx.org\/contents\/caa57dab-41c7-455e-bd6f-f443cda5519c@9.757"}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/pressbooks\/v2\/chapters\/3316"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/wp\/v2\/users\/16"}],"version-history":[{"count":18,"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/pressbooks\/v2\/chapters\/3316\/revisions"}],"predecessor-version":[{"id":13909,"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/pressbooks\/v2\/chapters\/3316\/revisions\/13909"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/pressbooks\/v2\/parts\/89"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/pressbooks\/v2\/chapters\/3316\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/wp\/v2\/media?parent=3316"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/pressbooks\/v2\/chapter-type?post=3316"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/wp\/v2\/contributor?post=3316"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/quantitativereasoning\/wp-json\/wp\/v2\/license?post=3316"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}