It's the difference between margin and markup, and it's very much real
world practice.

If you want to mark up your price to 28% over *cost*, then your way is
absolutely correct:

=(128 - 100)/100 === 28%

However, that means that your margin, or %profit on *sales* is only

=(128 - 100)/128 === 21.875%

If you want to make 28% profit on sales, you need to use

= 100/(1-28%) === $138.89

Check your profit as a percentage of sales:

= (138.89 - 100)/138.89 === 28%




In article .com,
wrote:


Why would he think that he's correct? Is it some accounting practice,
but not real world practice? Or maybe something a person not originally
from the US would have learned?

Thanks for clearing this up.