If the cost is 200 and markup is 25% followed by 8% tax, what is the final price?

• A. 250
• B. 288
• C. 264
• D. 270

Answer: (D)

Applying percentage changes in sequence: first add the markup to the cost, then apply tax to that new subtotal. Start with 200. A 25% markup increases it by 50, giving 250. Then an 8% tax on 250 adds 20, bringing the total to 270. You can see it in one step as well: 200 × 1.25 × 1.08 = 200 × 1.35 = 270. The tax is charged on the price after the markup, not on the original cost, which is why the two percentages multiply. A common trap is to add the percentages together and apply them to the original cost, which would be 200 × 1.33, yielding 216—not correct for sequential application. Final price: 270.