5
QuizMultiple Choice

Business Income — Quiz

Question 5 • Financial Math

A shoe store buys a pair of shoes for $⁢100 They decide to offer a 20% discount on the original price and then mark it up by 30% A store employee calculated the final price, resulting in a final sale price of $⁢84 Miscalculations on the final price were later found. The employee's steps are shown: Apply the discount: $⁢100+($⁢100⋅0.20)=$⁢120 Apply the markup: $⁢120−($⁢120⋅0.30)=$⁢84 Identify the mistake in the employee's calculation.

Answer
A
The employee calculated the markup correctly but the discount incorrectly.
B
The employee did not use the correct initial price.
C
The employee mistakenly applied the discount as a markup and the markup as a discount.
D
The employee calculated the discount correctly but the markup incorrectly.

Explanation

A 20% discount should be subtracted from the original $100: $100 − ($100 × 0.20) = $80. Instead, the employee added 20%, treating the discount as a markup. Then a 30% markup should be added, but the employee subtracted it, treating the markup as a discount. Thus the employee switched the discount and markup, as choice C states.

AI-written and checked against the verified answer.

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