Financial Literacy: Lesson 7 Sales Tax

What is the primary purpose of sales tax?

• To increase the price of goods

• To generate revenue for the government

• To discourage buying certain items

• To provide discounts to buyers

Which of the following states does NOT have a state sales tax?

• California

• Texas

• Delaware

• Florida

How is sales tax generally calculated?

• As a fixed amount per item

• As a percentage of the purchase price

• Based on the buyer's income

• As a random amount

What is the first step in calculating sales tax for an item?

• Multiplying the price by the sales tax percentage

• Adding the sales tax to the price

• Converting the sales tax percentage to a decimal

• Subtracting the sales tax from the price

If an item costs $10 and the sales tax rate is 7%, what is the total cost after tax?

• $7.10

• $17.00

• $10.07

• $10.70

Frankie wants to buy a book that costs $5 with a sales tax rate of 8.25%. What is the total cost of the book?

• $5.25

• $5.50

• $5.82

• $5.41

Why is it important to round the final cost to the nearest hundredth?

• To make the calculation easier

• To match the currency format

• To increase the total cost

• To reduce the tax amount

What should you do to find out the sales tax rate in your area?

• Use a fixed rate of 5%

• Ask a friend

• Guess the rate

• Do some research

How can understanding sales tax help you?

• It makes shopping more fun

• It helps you avoid paying taxes

• It helps you manage your money better

• It allows you to get discounts

Where can you find more resources on financial literacy?

• At learn.org

• In a magazine

• On social media

• At the local store