-2
$\begingroup$

Say I want to charge my customer 100.00. I need to add a fee on top of the 100.00 so that after a 2.9% credit card fee + 0.30c flat fee is taken from the 100.00, I end up with 97.00 (97%) Net

What would be an equation for something like this?

Ex. $100.00

enter image description here

Ex. $50.00

enter image description here

Ex. $75.00

enter image description here

$\endgroup$
6
  • 1
    $\begingroup$ What is meant by the 0.30c flat fee? Is that 30 cents on any transaction, regardless of the amount? $\endgroup$
    – k endres
    Commented Jul 7 at 22:21
  • $\begingroup$ yes. I'm trying to figure out what the number would be for 200.00. Do I charge 200.10 to Net $196.00? Or do I charge 200.45? $\endgroup$
    – user1186050
    Commented Jul 7 at 22:24
  • $\begingroup$ It seems that the flat fee is $\$0.30$, not $0.30$ cent. $\endgroup$
    – peterwhy
    Commented Jul 7 at 23:19
  • $\begingroup$ correct, sorry if I didn't express the amount correctly $\endgroup$
    – user1186050
    Commented Jul 7 at 23:24
  • $\begingroup$ Firstly clarify, whether you want to know (a) how much more than 100 or 200 you need to charge so that after deducting credit card feeand 30c, you net 100 or 200 or (b) you will charge 100 or 200 and you want to know what you will net after deducting creditcard fee and 30c. $\endgroup$
    – true blue anil
    Commented Jul 7 at 23:42

4 Answers 4

Reset to default
2
$\begingroup$

I will assume the 2.9% fee is taken before the flat fee of 0.30.

Say we want to net 97% of $x$. Then we need to charge $y$ so that $$ y-\frac{2.9y}{100}-0.3=\frac{97x}{100} $$ Now solving for $y$: \begin{align*} \frac{97.1y}{100}-0.3&=\frac{97x}{100} \\ 97.1y-30&=97x \\ 97.1y&=97x+30 \\ y&=\frac{97x+30}{97.1} \end{align*} To see if it works for the given examples:

Let $x=100$. Then $$y=\frac{97\cdot 100+30}{97.1}=\frac{9730}{97.1}=100.20597\ldots \approx 100.21$$ Let $x=50$. Then $$y=\frac{97\cdot 50+30}{97.1}=\frac{4880}{97.1}=50.25746\ldots \approx 50.26$$

as desired. Now let $x=200$. Then $$y=\frac{97\cdot 200+30}{97.1}=\frac{19430}{97.1}=200.10298\ldots \approx 200.10$$

$\endgroup$
1
  • $\begingroup$ thanks for the help. Question - Currently I charge my customers the 2.9% + 0.30 fee when I charge their card. Ex. 10.00 charge, I charge my customer 10.61, so my customer eats this cost/fee. What I'd like to do is reduce this cost for my customer by passing this fee (2.9%) onto the recipient of the payout (Ex. Uber -> rider gets charged, driver gets payed). So now that I have the 97% remaining, I can take another 3% for my fee and pass 94% onto the payout recipient (driver). I think this method will work, but not sure as I'm not an accountant. I think this math works? $\endgroup$
    – user1186050
    Commented Jul 7 at 23:40
2
$\begingroup$

You are given that you will end up with $97. What you don't know is how much to charge the customer to end up with that amount, if I understand the question correctly. So 97 is equal to x (the amount you want to charge) minus the credit card fee (a percentage times x) minus the flat fee of 0.30. Solve for x. Will that help?

$97=x-(0.029)x-0.3$

For any amount you want to net, instead of 97, substitute that number in the equation.

$\endgroup$
1
$\begingroup$

The simple way, without algebra, is to look at it like this:

For face value of \$200, you are willing to lose 3% of 200 = \$6 But your charges are 2.9% of \$200 + 30c = \$6.10 So you will bill the customer 200+(6.10 -6) = \$200.10

For face value of \$100, you are willing to lose 3% of 100 = \$3 But your charges are 2.9% of \$100 + 30c = \$3.20 So you will bill the customer 100+(3.20-3) = \$100.20

As a last example for face value of \$75 you are willing to lose 3% of 75 = \$2.25
But your charges are 2.9% of \$75 + 30c = \$2.475
So you will bill the customer 75+(2.475 -2.25) = \$75.225 which, of course will have to be rounded off to \$75.23

$\endgroup$
1
$\begingroup$

Let's say that originally, you wanted to charge your customer an amount of $A$, but on second thought, you want to charge an additional amount of $\delta A$ so that you will have a remaining amount of $\pi A$ after a credit card fee (which is based on the total amount you charge your customer, at a rate of $c$) and a flat fee $F$.

In equations, we have

$$\begin{align} \left( A + \delta A \right) - c \left( A + \delta A \right) - F & = \pi A, \\ \left( 1 - c \right) \left( A + \delta A \right) - F & = \pi A, \\ \left( 1 - c \right) \left( A + \delta A \right) & = \pi A + F, \\ A + \delta A & = \frac {\pi A + F}{1 - c}, \\ 1 + \delta & = \frac {\pi + F / A}{1 - c}, \\ \delta & = \frac {\pi + F / A}{1 - c} - 1. \end{align}$$

This is the percentage that you need to additionally charge to achieve your goal. Specifically in your case, $\pi = 97.0 \%$, $F = 0.30$ and $A = 100$, $c = 2.9 \%$, so

$$\delta = \frac {97.0 \% + 0.30 / 100}{1 - 2.9 \%} \approx 0.206 \%, \; \delta A \approx 0.21.$$

If $A = 50$, other things being equal, then

$$\delta = \frac {97.0 \% + 0.30 / 50}{1 - 2.9 \%} \approx 0.515 \%, \; \delta A \approx 0.26.$$

You can change the values of the parameters as you want.

$\endgroup$
1
  • $\begingroup$ thanks for the sanskrit. It's above me, but I'll give you an upvote for helping me. $\endgroup$
    – user1186050
    Commented Jul 8 at 2:34

Not the answer you're looking for? Browse other questions tagged .