On Mon, 11 Jul 2005 02:05:29 GMT, wrote:


Here's my view. Say I have a product with my cost of $100.00

I want to add 28% to that. I think I should end up at $128.00.

My math is simply $10.00*1.28 = $12.80

Given your statement of the question, what you did is correct.

(Though please note that you changed the numbers by 10-fold from your
line 2 to line 3.)



However, I have had someone else tell me that I'm wrong and need to do
the following.

First. 100-x=y
Second. 100/y=z
Third. A*z=$$$.$$

So,
First. 100-28 = 72
Second. 100/72 = 1.38888889
Third. 10*1.3889 = $13.89


Now to me this person is crazy. I mean I sold stuff for years and
sales tax wasn't that complicated. If something was $10.00 + %5.75tax,
the total is $10.58.

Not 100-5.75 = 94.25, 100/94.25 = 1.061007, $10.00*1.061007 = $10.61

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?



Not sure what the person was trying to do. It is a common problem to
"do the reverse". Eg... sells for 12.80. Markup was 28%. What was your
cost. But what you show above does not fit that.


SellPrice = cost + (cost * rate) = cost(1+rate)
where rate is the tax or markup, as a decimal.

According to your statement, you have Cost, want SellPrice. It is a
proper question to have SellPrice, and want Cost. Your friend may have
been thinking of that -- though did not do it right. You might explain
that case to him.


Key... be clear what the question is.

bob


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