Tax, Tip, and Discount

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What is tax?

Back

Tax is a percentage of the cost of an item that is added to the price, which is paid to the government.

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How do you calculate tax?

Back

To calculate tax, multiply the cost of the item by the tax rate (as a decimal). For example, for a $45 item with a 6% tax rate: $45 x 0.06 = $2.70.

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What is a tip?

Back

A tip is a small amount of money given to someone for their service, usually expressed as a percentage of the total bill.

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How do you calculate a tip?

Back

To calculate a tip, multiply the total cost of the meal by the tip percentage (as a decimal). For example, for a $7.50 meal with a 15% tip: $7.50 x 0.15 = $1.13.

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What is a discount?

Back

A discount is a reduction in the price of an item, usually expressed as a percentage off the original price.

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How do you calculate the sale price after a discount?

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To find the sale price, subtract the discount amount from the original price. For example, for a $15 DVD with a 10% discount: $15 x 0.10 = $1.50; Sale price = $15 - $1.50 = $13.50.

Front

What is the after-tax cost?

Back

The after-tax cost is the total price of an item after adding the tax to the original price.

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How do you find the after-tax cost?

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To find the after-tax cost, add the tax amount to the original price. For example, for a $10.25 item with a 6% tax: Tax = $10.25 x 0.06 = $0.615; After-tax cost = $10.25 + $0.615 = $10.87.

Front

What does 'subtracted' mean in terms of discounts?

Back

'Subtracted' means to take away a certain amount from the original price to find the new price after a discount.

Front

If an item costs $50 and has a 20% discount, what is the discount amount?

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The discount amount is $50 x 0.20 = $10.