The formula to calculate the initial cost is:
\[ IC = \frac{FC}{1 - \frac{PC}{100}} \]
Where:
Let's say the final cost (\( FC \)) is $1200 and the percentage change (\( PC \)) is 20%. Using the formula:
\[ IC = \frac{1200}{1 - \frac{20}{100}} \]
We get:
\[ IC = \frac{1200}{0.8} = 1500 \]
So, the initial cost (\( IC \)) is $1500.
The initial cost is the original amount before any changes in cost. It is calculated by dividing the final cost by 1 minus the percentage change in cost. This calculation is useful for understanding the original pricing before adjustments were made.