Selling Price after a 20% Profit Margin is applied to an item that Cost $80

Given: Cost = $80,  Profit Margin = 20%
Profit Margin as a Decimal: 20% = 0.2
Formula:
Selling Price =  

Cost/ 1 – Profit Margin as a Decimal

Selling Price =  

$80/ 1 – 0.2

Selling Price =  

$80/ 0.8

Selling Price = $100
Notes:
Profit = Selling Price – Cost = $100 – $80 = $20
Markup Amount = Profit = $20
Markup Percentage =  

Markup Amount/ Cost

=  

$20/ $80

= 0.25 = 25%