2.6 - Sales Tax, Tips, Markup

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 sales tax?

Back

To calculate sales tax, multiply the sale price by the sales tax rate (as a decimal). For example, for a $100 item with a 6.5% tax rate: $100 x 0.065 = $6.50.

Front

What is the formula to find the total cost including sales tax?

Back

Total Cost = Sale Price + (Sale Price x Sales Tax Rate).

Front

If a jacket costs $74.95 and the sales tax is 5%, what is the total cost?

Back

Total Cost = $74.95 + ($74.95 x 0.05) = $78.70.

Front

What is a tip?

Back

A tip is a small amount of money given to someone for their service, typically 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). For example, for a $50 bill with a 20% tip: $50 x 0.20 = $10.

Front

What is the total bill if you leave a 20% tip on a $58 bill?

Back

Total Bill = $58 + ($58 x 0.20) = $69.60.

Front

What is markup?

Back

Markup is the amount added to the cost price of goods to cover overhead and profit.

Front

How do you calculate the final price with markup?

Back

Final Price = Cost Price + (Cost Price x Markup Rate).

Front

If a computer costs $1,500 and the store charges 7% tax, what is the total cost?

Back

Total Cost = $1,500 + ($1,500 x 0.07) = $1,605.