Question about Texas Instruments TI-83 Plus Calculator

# 600,000.00 divided by 2500= - Texas Instruments TI-83 Plus Calculator

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Posted on Apr 01, 2011

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Posted on Jan 02, 2017

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Here we go
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### I must not understand what a margin is so could someone explain, the instructions give this example: If I purchase something for \$2000 and want to make a 20% profit I would need to sell it for \$2500 (2000...

Hi,
I think you should refer to you definitions. The 20% is called the markup. The profit margin is calculated with respect to the revenue. So you should divide the 400\$ by 2400\$ to get a net profit margin of 400/2400 =0.1667 or 16.67% (And we are not taking into account the taxes).

Margin = Markup /(price + Markup)
Markup = Margin* (Price +Markup)
Markup = Margin*Markup + Margin* Price
Markup*(1-Margin) =Margin*Price
Markup = Margin*Price/( 1-Margin)
For Price =2000, Margin =0.2 (that is 20%)
Markup = 0.2*2000(1-0.8) =0.2*2000/0.8
Markup = 2000*(0.2/0.8)= 2000*0.25 = 500

Thus to have a (net) profit margin of 20%, an item costing 2000\$ must be marked up by 500\$.

Try not to reason with numbers. Write the defining relation and use algebra to isolate for the variable you seek.

Hope it helps.
Thank you for using Fixya and for rating this solution.

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