How to Find a Number Before a Percentage Mark-Up Has Been Added

by Michael Keenan; Updated September 26, 2017
Merchants mark up their prices from the original cost.

When businesses price their items for sale, the difference between the wholesale cost of the item and the retail price is called the markup. Businesses usually report the markup as a percentage. If you know the sales price and the markup percentage, you can calculate the original price before the markup has been added.

Step 1

Convert the percentage markup to a decimal by dividing by 100. For example, if you were using a 20 percent markup, you would divide 20 by 100 to get 0.2.

Step 2

Add 1 to the markup expressed as a decimal. In this example, you would add 1 to 0.2 to end with 1.2.

Step 3

Divide the price after markup has been added by the result from step 2 to find the price before the markup. For example, if the final price of the item is $240, you would divide $240 by 1.2 to find the price before the markup to be $200.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

Photo Credits

  • market goods for sale image by evillager from Fotolia.com