If ABC Builder sells a home at a 20% mark-up on the cost of construction of $205,000, what is the mark-up in dollars?

To find the mark-up in dollars, we can calculate it by applying the percentage mark-up (20%) to the cost of construction ($205,000). The formula for calculating the mark-up is as follows:

Mark-up in dollars = Cost of construction x (Mark-up percentage)

Substituting the known values into the formula gives us:

Mark-up in dollars = $205,000 x 0.20

Calculating this results in:

Mark-up in dollars = $41,000

This demonstrates that the correct answer reflects the application of the 20% mark-up on the $205,000 cost, which totals $41,000. Such a calculation is essential in understanding basic pricing strategies in the building and construction industry, especially in terms of how businesses determine their selling price based on costs and desired profit margins.