Chapter 7.6, Problem 28E

To determine

To find: The maximum discount percent the store can use, if the store doesn’t want to loss money.

Answer to Problem 28E

The maximum discount percent the store can use is $37.5\%$ .

Explanation of Solution

Given information: A store marks up the wholesale price of an item by $60\%$ . A month later the store puts the item on sale.

Calculation: The markup rate is $60\%$ .

Let, The wholesale price of the item $=x$

Let’s find the retail price,

Retail price $=$ Wholesale price $\times$ ( $100\%+$ Markup percent)

  $\begin{array}{l}=x\times (100\%+60\%)\\ =x\times 160\%\\ =x\times \frac{160}{100}\\ =1.60x\end{array}$

Let’s find the maximum discount percent the store can use,

  $\begin{array}{l}=\frac{\text{Retail price - Wholesale price}}{\text{Retail price}}\times 100\%\\ =\frac{1.60x-x}{1.60x}\times 100\%\\ =\frac{0.60x}{1.60x}\times 100\%\\ =\frac{0.60}{1.60}\times 100\%\\ =0.375\times 100\%\\ =37.5\%\end{array}$

Hence, The maximum discount percent the store can use is $37.5\%$ .