Name_________________________________________________Date___________Period__________
Lesson 7: Markup and Markdown Problems
Student Outcomes
▪ Students understand the terms original price, selling price, markup, markdown, markup rate, and markdown rate.
▪ Students identify the original price as the whole and use their knowledge of percent and proportional relationships
to solve multi-step markup and markdown problems.
▪ Students understand equations for markup and markdown problems and use them to solve for unknown
quantities in such scenarios.
Definitions:
MARKUP: A markup is the amount of increase in a price.
MARKDOWN: A markdown is the amount of decrease in a price.
ORIGINAL PRICE: The original price is the starting price. It is sometimes called the cost or wholesale price.
SELLING PRICE: The selling price is the original price plus the markup or minus the markdown.
MARKUP/MARKDOWN RATE: The markup rate is the percent increase in the price, and the markdown rate (discount rate) is the
percent decrease in the price.
Most markup problems can be solved by the equation: Selling Price = (1 + 𝑚)(Whole), where 𝑚 is the markup
rate, and the whole is the original price.
Most markdown problems can be solved by the equation: Selling Price = (1 − 𝑚)(Whole), where 𝑚 is the
markdown rate, and the whole is the original price.
Classwork
Example 1: A Video Game Markup
Games Galore Super Store buys the latest video game at a wholesale price of $30.00. The markup rate at Game’s Galore
Super Store is 40%. You use your allowance to purchase the game at the store. How much will you pay, not including tax?
a. Write an equation to find the price of the game at Games Galore Super Store. Explain your equation.
b. Solve the equation from part (a).
c. What was the total markup of the video game? Explain.
d. You and a friend are discussing markup rate. He says that an easier way to find the total markup is by multiplying
the wholesale price of $30.00 by 40%. Do you agree with him? Why or why not?
Example 2: Black Friday
A $300 mountain bike is discounted by 30% and then discounted an additional 10% for shoppers who arrive before 5:00
a.m.
a. Find the sales price of the bicycle.
b. In all, by how much has the bicycle been discounted in dollars? Explain.
c. After both discounts were taken, what was the total percent discount?
Example 3: Working Backward
A car that normally sells for $20,000 is on sale for $16,000. The sales tax is 7.5%.
a. What percent of the original price of the car is the final price?
b. Find the discount rate.
c. By law, sales tax has to be applied to the discount price. However, would it be better for the consumer if the
7.5% sales tax was calculated before the 20% discount was applied? Why or why not?
d. Write an equation applying the commutative property to support your answer to part (c).
Exercise 4
a. Write an equation to determine the selling price in dollars, 𝑝, on an item that is originally priced 𝑠 dollars after a
markup of 25%.
b. Create and label a table showing five possible pairs of solutions to the equation.
c. Create and label a graph of the equation.
d. Interpret the points (0,0) and (1, 𝑟).
Lesson Summary
To find the markup or markdown of an item, multiply the whole by (1 ± 𝑚), where 𝑚 is the
markup/markdown rate.
To apply multiple discount rates to the price of an item, you must find the first discount price and then
use this answer to get the second discount price.
Problem Set
1. You have a coupon for an additional 25% off the price of any sale item at a store. The store has put a robotics kit on
sale for 15% off the original price of $40. What is the price of the robotics kit after both discounts?
2. A sign says that the price marked on all music equipment is 30% off the original price. You buy an electric guitar for
the sale price of $315.
a. What is the original price?
b. How much money did you save off the original price of the guitar?
c. What percent of the original price is the sale price?
3. The cost of a New York Yankee baseball cap is $24.00. The local sporting goods store sells it for $30.00. Find the
markup rate.
4. A store advertises that customers can take 25% off the original price and then take an extra 10% off. Is this the same
as a 35% off discount? Explain.
5. An item that costs $50.00 is marked 20% off. Sales tax for the item is 8%. What is the final price, including tax?
a. Solve the problem with the discount applied before the sales tax.
b. Solve the problem with the discount applied after the sales tax.