Question

DeWitt Company sells a kitchen set for $445. To promote July 4, DeWitt ran the following advertisement:

Beginning each hour up to 4 hours we will mark down the kitchen set 12%. At the end of each hour, we will mark up the set 2%.

Assume Ingrid Swenson buys the set 1 hour 50 minutes into the sale.

a. What will Ingrid pay? (Round your answer to the nearest cent.)

b. What is the markdown percent? (Enter your response as a percentage rounded to two decimal places.)

Answer 1

Beginning of each hour = mark down 12%

End of each hour =mark up 2%

Price at the beginning of first hour ($445)*(100%-12%)	$391.6	MARK DOWN
Price at the end of first hour ($391.6)(100%+2%)	$399.432	MARK UP
Price at the beginning of second hour ($399.432)(100%-12%)	$351.50	MARK DOWN
Price at the end of second hour ($351.50)(100%+2%)	$358.53	MARK UP

As purchase is made at the 1 hour 50 minutes it will be between beginning of second hour and before the end of second hour

so price would be $351.50

(2) Mark down percent

actual price-price paid/actual price

=[$445-$351.50] / $445

=21.01%