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Posted By: Cat

It's 10%. The problem is you are dividing by the wrong denominator. You can't pick and choose numerators and denominators:

Current bid is $1,000. Which means you will pay $1,200.

The bid is raised to $1,100. You pay $1,320.

$1,320 is 10% higher than $1,200.

You need to include the vig in both equations.