Understanding Sales Tax and Financial Literacy

The video tutorial on financial literacy for kids explains the concept of sales tax, its purpose, and how it is calculated. It highlights that sales tax is a percentage of the purchase price and varies by state and item. An example with a character named Frankie demonstrates how to calculate sales tax on a book purchase. The video encourages viewers to research their local sales tax rates and apply the knowledge to become more financially literate. It concludes with a call to explore additional resources on Learn Bright.

What is the primary purpose of sales tax?

• To benefit sellers

• To increase the price of goods

• To provide funds for government projects

• To discourage buying

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

• Texas

• California

• Florida

• Delaware

How is sales tax generally calculated?

• As a percentage of the purchase price

• As a monthly fee

• As a fixed amount per item

• Based on the buyer's income

What is the first step in calculating sales tax according to the example with Frankie?

• Add the tax rate to the price

• Convert the tax rate to a decimal

• Subtract the tax from the total

• Multiply the price by the tax rate

In the example, what is the total cost of the book after adding sales tax?

• $5.82

• $5.00

• $6.00

• $5.41

What is the sales tax rate used in the example with Frankie?

• 6.5%

• 8.25%

• 7.5%

• 9.0%

What should you do after finding the sales tax rate in your area?

• Ignore it

• Ask for a discount

• Calculate the tax on different items

• Complain about it

Why is it important to understand sales tax?

• To reduce government revenue

• To avoid paying it

• To increase your income

• To manage money wisely

What is one benefit of being financially literate?

• Getting free items

• Making informed financial decisions

• Spending more money

• Avoiding all taxes

Where can you find more resources on financial literacy?

• At the local mall

• On social media

• At learnbright.org

• In a comic book