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Category: Tax
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Experience:  I am a lawyer who understands tax law and finance.
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# If i bought something for \$10.00 and sold it for \$20.00, is ...

### Resolved Question:

If i bought something for \$10.00 and sold it for \$20.00, is it a 200% mark up?
Submitted: 8 years ago.
Category: Tax
Expert:  Guru_Guy replied 8 years ago.
Hello,

No, that is a 100% mark up. Mark up is the difference between the sales price and market price. So if you sell something for \$20 that you purchased for \$10, your mark up is \$10 (\$20 - \$10). When calculating the percentage, you compare that mark up to the purchase price. The \$10 mark up is 100% of the \$10 purchase price.

I hope this helps!
Customer: replied 8 years ago.
but if you multiply \$10. times 200% you get \$20.
That is why I'm confused.
Expert:  Guru_Guy replied 7 years ago.
The markup is basically the amount of profit made. So the profit in the scenario you lay out is only \$10 (\$20 sales price minus the \$10 cost). That \$10 profit is 100% of the initial investment. You are calculating the markup based on the total price, not just the amount of profit.

I hope this helps!
Guru_Guy, Lawyer (JD)
Category: Tax
Satisfied Customers: 2418
Experience: I am a lawyer who understands tax law and finance.

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