If the cost of an item is $50 and the markup is 25%, what is the selling price?

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Multiple Choice

If the cost of an item is $50 and the markup is 25%, what is the selling price?

Explanation:
A selling price with a markup means you multiply the cost by 1 plus the markup rate. Here, 25% markup on a cost of 50 is 50 × 1.25, which equals 62.50. So the selling price should be $62.50. To see why the other numbers don’t fit: 50 would be the cost with no markup. 75 would come from a 50% markup (50 × 1.5), not 25%. 80 would come from a 60% markup (50 × 1.6).

A selling price with a markup means you multiply the cost by 1 plus the markup rate. Here, 25% markup on a cost of 50 is 50 × 1.25, which equals 62.50. So the selling price should be $62.50.

To see why the other numbers don’t fit: 50 would be the cost with no markup. 75 would come from a 50% markup (50 × 1.5), not 25%. 80 would come from a 60% markup (50 × 1.6).

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