Car Auction

[notanumbersguy]

I need some help backing into an equation. The market price for a certain car is $50,000 and a simlar car is going to auction that I would like to bid on. However, there is a 12% fee the auction charges to buyers, so I am trying to figure out the maximum amount I could bid so I would not exceed the market value ($50,000). My initial thought was 50,000*(1-0.12)=44,000, but that doesn't seem right to me as the difference between 50,000 and 44,000 is 6,000, which is 13.6%. Any help as to what I am doing wrong? Thanks

 

[Steven G]

Let x= the price you bid for the car. Then your bid plus 12% of your bid should equal 50,000.

When you take 12% of different amounts you get different answers. That is why if you subtract 12% from a number and add back 12% of this NEW number you do not get back to where you started! To be precise, when you subtracted 12% of the your bid from 50,000 you got $44,000 ($6,000 less). Now when you compute 12% of $44,000 there is no reason to expect to get $6000. You are computing 12% of different values expecting to get back the same answer. It won't happen, sorry.

 

[Deleted member 4993]

I need some help backing into an equation. The market price for a certain car is $50,000 and a simlar car is going to auction that I would like to bid on. However, there is a 12% fee the auction charges to buyers, so I am trying to figure out the maximum amount I could bid so I would not exceed the market value ($50,000). My initial thought was 50,000*(1-0.12)=44,000, but that doesn't seem right to me as the difference between 50,000 and 44,000 is 6,000, which is 13.6%. Any help as to what I am doing wrong? Thanks

You worked with "incorrect" equation - but to your credit you caught it.

Suppose:

The auction price that you want to pay is = C

then the auction fee is = 12% of C = 0.12 * C

The total money you want to spend = (The auction price that you want to pay) + (the auction fee)

Looking at those three statements - what should be your correct equation?

continue.......