How to calculate sales tax
To calculate sales tax of an item, simply multiply the cost of the item by the tax rate.
Exercises # 1:
You buy a car for 20,000 dollars and pay 5% in tax. How much is tax?
Tax = 20,000 times 5% = 20,000 times 0.05
Tax = 20,000 times 0.05 = 1,000 dollars.
The cost with tax is 20,000 + 1000 = 21,000
Exercises # 2:
You buy a house for 400,000 dollars and pay a tax of 6%. How much is tax?
Tax = 400,000 times 6%
Tax = 400,000 times 0.06 = 24,000 dollars
The cost with tax is 400,000 + 24,000 = 424,000 dollars.
Exercises # 3:
The list price of a scientific calculator is 100 dollars.If you get a price discount of 15% and pay 5% for tax, what is the actual cost of your calculator?
First, find the price after the discount
Discount = 100 times 15% = 100 times 0.15 = 15
Sale price = 100 - 15 = 85 dollars
Tax paid = 85 times 5% = 85 times 0.05 = 4.25
Actual cost = 85 + 4.25 = 89.25 dollars.
You will get the same answer if you compute the tax paid first and then compute the discount.