A used-car dealer has a vehicle on the lot with a sticker price of $5999. if the dealer markup on used vehicles is 20%, how much did the dealer pay for the car?

Question

Lilah Petty

Business

4 June, 21:50

A used-car dealer has a vehicle on the lot with a sticker price of $5999. if the dealer markup on used vehicles is 20%, how much did the dealer pay for the car?

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Reed · Answer 1

A price markup is an increase in the price the dealer sells that he ensures in order to gain guaranteed profit. If the markup is 20%, this means that he added 20% of what he paid for the car, and used this price for sale. Therefore, we let x be the price the dealer paid for the car.

$5999 = x + 0.2x = 1.2x

x = $4999

Thus, the dealer paid $4999 originally for the car.