A worked markup example: 25% on a ₹800 cost
A ₹800 cost price with a 25% markup adds ₹200 (₹800 × 25 ÷ 100) to reach a ₹1,000 selling price. Markup amount = cost price × markup% ÷ 100; selling price = cost price + markup amount — a straightforward addition on top of cost.
A worked margin example: 20% on the same ₹800 cost
A 20% margin on that same ₹800 cost works differently: selling price = cost price ÷ (1 − margin% ÷ 100) = 800 ÷ 0.80 = ₹1,000, with a profit amount of ₹200 (₹1,000 − ₹800). Margin solves for the selling price that makes the profit exactly the specified percentage of that selling price, not of the cost.
Why the two formulas need different arithmetic
Markup's percentage is applied directly to a known number (cost price), so it's simple multiplication. Margin's percentage describes a fraction of a number that isn't known yet (the selling price being solved for), so the formula needs to divide by (1 − margin%) rather than multiply — algebraically rearranging "profit is X% of selling price" to solve for selling price.
Why margin can never reach 100%
A 100% margin would require dividing by (1 − 1) = 0, which is undefined — mathematically, no finite selling price could make the cost price represent 0% of it while still being a real cost. Markup has no such ceiling: a markup percentage can go arbitrarily high, since it's just added on top of an already-fixed cost.