A music store typically marks up the instruments it sells by 25%. Christine works at this music store. The store recently purchased a clarinet for $75. Christine marks this clarinet with a $100 price tag because 100 – 75 = 25 and 25 is 25% of 100. Did Christine mark the price of this clarinet correctly? Explain your reasoning.
Yes, Christine marked the price of the clarinet correctly. The store typically marks up the instruments by 25%, which means the selling price should be 125% of the cost price. In this case, the cost price of the clarinet is $75.
To calculate the selling price, we can multiply the cost price by 125% (equivalent to adding 25% to the cost price).
$75 * 1.25 = $93.75
So, the selling price should be $93.75. However, in retail, prices are usually rounded up or down to the nearest whole number. In this case, the price was rounded up to $100, which is a reasonable approximation of the actual selling price. Thus, Christine marked the price of the clarinet correctly.