Sales Tax, Tip, Markup Practice Problems

Front

What is sales tax?

Back

Sales tax is a percentage of the sale price of goods and services that is collected by the seller and paid to the government.

Front

How do you calculate the total price including sales tax?

Back

To calculate the total price including sales tax, multiply the original price by the sales tax rate (as a decimal) and add that amount to the original price.

Front

If a store marks up a product by 60%, how do you find the selling price?

Back

To find the selling price after a 60% markup, multiply the cost price by 1.60 (which is 100% + 60%).

Front

What is a tip?

Back

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

Front

How do you calculate a tip?

Back

To calculate a tip, multiply the total bill by the tip percentage (as a decimal).

Front

If a meal costs $27.31 and you want to leave a 23% tip, how much is the tip?

Back

The tip is $6.28, calculated by multiplying $27.31 by 0.23.

Front

What is markup?

Back

Markup is the amount added to the cost price of a product to determine its selling price.

Front

If a product costs $1.50 and is marked up by 60%, what is the selling price?

Back

The selling price is $2.40, calculated by multiplying $1.50 by 1.60.

Front

What is the formula for calculating sales tax?

Back

Sales Tax = Original Price x Sales Tax Rate.

Front

If a computer costs $675 and the sales tax is 6%, how much is the total cost?

Back

The total cost is $715.50, calculated by adding $675 and $40.50 (which is 6% of $675).