A store marks up price by 25% and then adds an 8% sales tax. If the base price is $50, what is the final price?

A store marks up price by 25% and then adds an 8% sales tax. If the base price is $50, what is the final price?

• A. $62.50
• B. $69.00
• C. $67.50
• D. $70.00

Answer: (C)

Two consecutive percentage changes multiply. Start with the base price: a 25% markup multiplies by 1.25, giving 50 × 1.25 = 62.50. The 8% sales tax is then applied to that new amount, multiplying by 1.08: 62.50 × 1.08 = 67.50. So the final price is $67.50. In other words, the total equals 50 × 1.25 × 1.08 = 50 × 1.35 = 67.50.

Two consecutive percentage changes multiply. Start with the base price: a 25% markup multiplies by 1.25, giving 50 × 1.25 = 62.50. The 8% sales tax is then applied to that new amount, multiplying by 1.08: 62.50 × 1.08 = 67.50. So the final price is $67.50. In other words, the total equals 50 × 1.25 × 1.08 = 50 × 1.35 = 67.50.