In a price problem, the last step is to divide the net to be received by the decimal found in step 2. If the net to be received is $120,000 and the decimal from step 2 is 0.80, what is the final price?

In a price problem, the last step is to divide the net to be received by the decimal found in step 2. If the net to be received is $120,000 and the decimal from step 2 is 0.80, what is the final price?

• A. $150,000
• B. $120,000
• C. $100,000
• D. $180,000

Answer: (A)

When the net amount you actually receive is a percentage of the selling price, that net equals price times the decimal. Here the decimal is 0.80, meaning you receive 80% of the final price. So the price is net divided by 0.80. Compute: 120,000 ÷ 0.80 = 150,000. Therefore the final price must be $150,000 because 0.80 × 150,000 = 120,000. The other options don’t fit this 80% relationship.

When the net amount you actually receive is a percentage of the selling price, that net equals price times the decimal. Here the decimal is 0.80, meaning you receive 80% of the final price. So the price is net divided by 0.80.

Compute: 120,000 ÷ 0.80 = 150,000. Therefore the final price must be $150,000 because 0.80 × 150,000 = 120,000. The other options don’t fit this 80% relationship.