Sales Tax, Tips, and Markup

Front

What is sales tax?

Back

Sales tax is a percentage of the purchase price added to the total cost of goods or services, collected by the seller and paid to the government.

Front

How do you calculate sales tax?

Back

To calculate sales tax, multiply the purchase price by the sales tax rate (as a decimal). Add the result to the original price to find the total amount owed.

Front

If an item costs $50 and the sales tax is 6%, how much is the sales tax?

Back

$3.00 (calculated as $50 x 0.06).

Front

What is a tip?

Back

A tip is a small amount of money given to someone for their service, typically 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 desired tip percentage (as a decimal).

Front

If your restaurant bill is $40 and you want to leave a 20% tip, how much should you tip?

Back

$8.00 (calculated as $40 x 0.20).

Front

What is markup?

Back

Markup is the amount added to the cost price of goods to cover overhead and profit, usually expressed as a percentage.

Front

How do you calculate the retail price after markup?

Back

To calculate the retail price, multiply the cost price by the markup percentage (as a decimal) and add it to the cost price.

Front

If a shirt costs $20 and has a 25% markup, what is the retail price?

Back

$25.00 (calculated as $20 + ($20 x 0.25)).

Front

What is the decimal equivalent of a percentage?

Back

To convert a percentage to a decimal, divide the percentage by 100.