TAKE OUT A
CALCULATOR
copyright©amberpasillas2010
Sales tax is calculated by multiplying the
retail price of an item by the sales tax rate
for an area. METHOD 1
Example: Shoes $100
Tax Rate 7%
Find 7% of $100
Change 7% to a decimal
0.07 x $100 = $7.00 tax
Total Purchase Price $100 + $7.00 = $107
copyright©amberpasillas2010
1
Sales tax is calculated by multiplying the
retail price of an item by the sales tax rate
for an area. METHOD 2
Example: Shoes $100
Tax Rate 7%
Add 7% to 100%. Find 107% of $100.
That includes the total price and the tax.
Change 107% to a decimal.
Multiply 1.07 x $100 = $107
Both methods give you the same answer!
copyright©amberpasillas2010
The sales tax in Ohio is 8.5%. Your family is
buying a new car for $20,000. What will be
the total cost of the car? METHOD 1
Example: Car $20,000
Tax Rate 8.5%
Find 8.5% of $20,000
Change 8.5% to a decimal
Sales Tax 0.085 x $20,000 = $1,700
Add the sales tax to the price of the car.
Total Purchase Price $20,000 + $1700 = $21,700
copyright©amberpasillas2010
2
The sales tax in Ohio is 8.5%. Your family is
buying a new car for $20,000. What will be
the total cost of the car? METHOD 2
Add 8.5% to 100%
Add 8.5% to 100% since that
includes the total price of the car &
the tax. Find 108.5% of $20,000.
Change 108.5% to a decimal
Multiply 1.085 x $20,000 = $21,700
Both methods give you the same answer!
copyright©amberpasillas2010
A family purchased a pool table for $825. The
sales tax rate was 7%. What was the total cost?
Method 1
Add sales tax at the end.
$825 x 7% = tax
Change 7% to a decimal
$825 x 0.07 = $57.75 tax
$825 + $57.75 = $882.75
Method 2
Add 7% to 100% first.
Multiply the price by 107%
$825 x 107% = total cost
Change 107% to a decimal
$825 x 1.07 = $882.75
So, the total cost of the purchase was $882.75.
copyright©amberpasillas2010
3
Commission is a profit that you can make.
Many different types of professions work
on commission.
• A sales man working at a retail store.
• A realtor can make commission on
selling houses.
•A car sales man.
The more the sales person sells the higher
commission or profit they will make.
copyright©amberpasillas2010
Your family is selling your house for
$160,000. The realtor charges a commission of
6%. How much commission will the realtor
receive?
Find 6% of 160,000
Change 6% to a decimal
= 0.06 x 160,000 = $9,600
Put your answer in a sentence:
The realtor’s commission is $9,600
copyright©amberpasillas2010
4
A realtor charges a commission of 6%. What
was the amount of commission on a property
that was sold for $250,000?
Find 6% of 250,000
Change 6% to a decimal
= 0.06 x 250,000 = $15,000
Put your answer in a sentence:
The realtor’s commission is $15,000
copyright©amberpasillas2010
As a courtesy it is always nice to leave a tip
when someone does something nice for you.
Many different types of professions work
for tips
A pizza delivery man
A waiter or waitress
A hairdresser
Usually the amount of tip depends on how
well you think the service was.
copyright©amberpasillas2010
5
If you get really good service at a restaurant it is
usually due to having a good waitress.
A good tip for a waitress is 15%.
If the service was not as well as you liked then
you can leave a smaller tip such as 10% or 5%.
People that work for tips are required by law to
report their tips as earning and pay taxes on them.
As a waitress for 4 years while I was in college,
the standard tips that you must report is 8% of the
bill.
copyright©amberpasillas2010
You and a friend go to lunch. The check
comes to $24.85. Figure out how much you
should tip if you want to leave 15%.
Make an estimate first.
Find 10%
of 25
= 0.10 x 25 = $2.50
Find 5%
of 25
= $3.75
= 0.05 x 25 = $1.25
An estimate for the tip is about $3.75
copyright©amberpasillas2010
6
You and a friend go to lunch. The check
comes to $24.85. Figure out how much you
should tip if you want to leave 15%.
Now solve using a calculator.
Find 15% of 24.85
Change 15% to a decimal
= 0.15 x 24.85
= $3.7275
Put your answer in a sentence:
The tip that should be left is $3.73
copyright©amberpasillas2010
The new tax rate this year in CA is 8.25%
The old tax rate in California was 7.25%
The California tax rate went up 1%
That means that for every $100 you spend
instead of paying $7.25 on tax, you will
now spend $8.25 on tax.
So that tax rate has gone up $1 for every
$100 you spend.
copyright©amberpasillas2010
7
Going up $1 may not seem like a big
change.
However, if you spend $1000 on a
purchase, then the extra tax rate will cost
you an extra $10.
If you purchase a new vehicle for
$10,000, then the extra tax rate will cost
you an extra $100.
copyright©amberpasillas2010
On leaving a tip, many people just double
the tax rate to calculate a good tip.
If you double 8.25% then you will be
leaving a tip of 16.50%
16.50% is close to leaving 15%.
copyright©amberpasillas2010
8
To always SHOW YOUR
WORK even if you use a
calculator!
Take out your study guide!!!
copyright©amberpasillas2010
#4
Sales Tax
A family purchased a DVD player for
$200. The sales tax rate was 7%. What
was the total cost of the purchase?
Method 1
Method 2
Add sales tax to the price:
Multiply the price by 107%
since 7% is added to the cost.
$200 x 7% = tax
$200 x .07 = $14.00 tax
$200 + 14.00 = $214.00
$200 x 107% = total cost
$200 x 1.07 = $214.00
So, the total cost was $214.00.
copyright©amberpasillas2010
9
#5
Commission & Tips
Mrs. Pasillas earned average tips of 18% while
waiting tables at Sambo’s. If her sales one night
were $730, what did she make in tips?
Tips = 18% of 730
Tips = 0.18
730 = $131.40
copyright©amberpasillas2010
10