How to calculate original price
Understanding how to calculate the original price of a product is essential, whether you are a retailer, a consumer, or a business owner. This knowledge enables you to determine discounts or markups and make informed purchasing decisions. In this article, we will discuss how to calculate the original price of an item considering discounts or markups.
Step 1: Gather the necessary information
To calculate the original price of an item, you will need some relevant information. This includes the current discounted price and percentage discount applied (or markup in case of an increase in price). Be sure to have these details readily available as you proceed.
Step 2: Convert percentage discount to decimal
You need to convert the discount percentage into decimal form for easy incorporation into calculations. To do this, divide the discount percentage by 100. For instance, if there’s a 20% discount, you need to convert it into decimal form by dividing 20 by 100, which gives you 0.20.
Step 3: Calculate the discount amount
Multiply the discounted price by the decimal discount value derived in step 2. The result will be the amount deducted from the original price.
For example, if you have a discounted price of $80 and a 20% discount (0.20), multiply $80 x 0.20 = $16.
Step 4: Determine the original price
To calculate the original or pre-discounted price, add the discount amount derived in step 3 back to the discounted price obtained.
Using our example above, add $16 (discount amount) to $80 (discounted price) = $96 (original price)
Conclusion:
Calculating an item’s original price is simple once you gather all necessary information and follow these four easy steps. Understanding these principles helps you assess savings or costs associated with discounts and mark-ups on products and make prudent financial decisions.