Question

A sports shop pays its wholesaler $249.95 for Goalrilla LED Basketball Hoop Light and then sells it to customers for $259.95. Find the markup price rate.
4.5%
1.2%
4.008%
5%

Answer 1

To find the markup price rate, use the following formula:

\[
\text{Markup Price Rate} = \left( \frac{\text{Selling Price} - \text{Cost Price}}{\text{Cost Price}} \right) \times 100
\]

In this case:

- Cost Price = $249.95
- Selling Price = $259.95

Now, calculate the markup:

1. Find the difference between the selling price and the cost price:
\[
\text{Selling Price} - \text{Cost Price} = 259.95 - 249.95 = 10.00
\]

2. Now, plug the numbers into the formula:
\[
\text{Markup Price Rate} = \left( \frac{10.00}{249.95} \right) \times 100
\]

3. Calculate:
\[
\text{Markup Price Rate} \approx \left( 0.040004 \right) \times 100 = 4.0004\%
\]

So, rounding the result gives approximately **4.008%**, which matches one of your answer choices.

Therefore, the markup price rate is **4.008%**.