Tax Discounts and Simple Interest

Learn sales tax and total cost, simple interest.

Lesson 3 of 32 parts Practice Flashcards

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Sales Tax and Total Cost

Objective: Explain sales tax and total cost, apply the stated method, and check its conditions.

Sales tax at decimal rate r adds r times the taxable price. The taxed total is price(1+r), assuming the stated price is the taxable base and there are no additional charges. Repeated identical purchases multiply the taxed per-item total. The example uses a supplied hypothetical rate, not a current local tax rule.

Formulas

Total = taxable price(1+r)

Worked examples

Try itA purchase costs $600 before 7% sales tax. What is the total for 7 identical purchases, all taxed?Show answer

Step 1: Add tax to each purchase. Step 2: Each taxed cost is 600+42=642. Step 3: Multiply by 7: total $4494.

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Sales Tax and Total Cost

Objective: Explain sales tax and total cost, apply the stated method, and check its conditions.

Formulas

Total = taxable price(1+r)

Worked examples

Try itA purchase costs $600 before 7% sales tax. What is the total for 7 identical purchases, all taxed?Show answer

Step 1: Add tax to each purchase. Step 2: Each taxed cost is 600+42=642. Step 3: Multiply by 7: total $4494.

Simple Interest

Objective: Explain simple interest, apply the stated method, and check its conditions.

Simple interest is I=Prt for principal P, annual decimal rate r, and time t in years. The principal stays fixed in this model. Final balance is P+I; compound interest follows a different model and cannot use the same shortcut. Interest alone and final balance are different answers.

Formulas

$I=Prt; balance=P+I$

Worked examples

Try itFind simple interest on principal $600 at 7% per year for 7 years.Show answer

Step 1: Use I=Prt with r as a decimal. Step 2: Substitute I=(600)(7/100)(7). Step 3: Interest is $294; this is not the final balance.

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