September 6, 2011

Objective: We will use the knowledge of percents and share ideas using real life examples of markups and markdowns. Agenda: Warm-up Presentation and Discussion Examples Practice Warm-Up: 1. Find 30% of 40. 3. 20 is what percent of 80? 2. Find 28% of 60. 4. 36 is what percent of 30?

Understanding Markups and Markdowns

Markup is the amount of money above the cost of a product or service that a business will charge for that product or service. The Price of a product or service is what a business is charging after it applies a markup. Markdown or discount is the reduction in price of a product or service based on a percentage of the original price. The Original Price of a product or service is what a business was charging before it decided to apply a markdown. The Sale Price of a product or service is what a business is charging after it applies a markdown.

Understanding Mark-Ups
The Markup Rate is expressed as a percentage and must be converted to a decimal to use in the formula The formula for determining the final price for the consumer is: Price = Cost x (1 + MarkupRate) Example: Walmart determines the price of ground beef by marking it up 30% above its cost. It pays $1.12 for each pound. What would the consumer pay per pound? Price = 1.12 x (1 + .30) = 1.12 x 1.30 = 1.456 The consumer would pay $1.46 for each pound of ground beef.

Understanding Markdowns or Discounts

The Markdown Rate is expressed as a percentage and must be converted to a decimal to use in the formula The formula for determining the final price you pay after a discount is:

SalePrice = OriginalPrice x (1 MarkdownRate) Example: Francescas has a 30% sale on all jeans and the Miss Me jeans are priced at $88. What would be the discounted price of the jeans? Sale Price = 88 x (1-.30) = 88 x .70 = 61.6 The discounted price you pay for the jeans is $61.60.