Financial Literacy:
Sales tax, Tip, and Markup
Sales tax - tax added onto an item when it is sold.
EX1) Find the total cost of an item
priced $43 with a sales tax of 8%.
8% = 0.08
43 X 0.08 = 3.44
Method 1
Step 1 Change % to decimal
Step 2 Multiply decimal
and cost
Round to hundredths if necessary
43 + 3.44 = 46.44
Step 3 Add product to
original cost
EX2) Find the total cost of an item priced
$75 with a sales tax of 6.75%.
Method 2
6.75% + 100% = 106.75%
Step 1
Add percent of
tax to 100%
106.75% = 1.0675
Step 2
Change % to
decimal
Step 3
Multiply decimal
and cost
Step 4
Round to
hundredths if
necessary
75 X 1.0675 = 80.0625
Total Cost = $80.06
Tip (gratuity)- small amount of money in return for
service. Usually a percent of the cost of service.
Same process to solve tax is used to solve tip.
EX3) You want to leave a 15% tip on a bill of $65. How much is
the tip? What is the total cost of bill?
65 X 0.15 = 9.75
65
+ 9.75
15% = 0.15
= 74.75
EX4) A phone cost $75 with a sales tax of 8.75%. How much
change would you have if you pay the bill with $85.
8.75% +100% = 108.75%
75 X 1.0875 = 81.5625
85 - 81.56
= $3.44
Markup - percent of increase
A store buys shoes from a manufacturer for $25. The markup is 30%.
What is the selling price?
25 X 43% =
25 X 0.43 = 10.75
25 + 10.75 = $35.75
Step 1
Find % of markup
Step 2
Add the markup
to the store cost
Assignment
Page 271
Problems 2-10 evens, 17
Notes
Date _____________
Financial Literacy:
Sales tax, Tip, and Markup
Sales tax - tax added onto an item when it is sold.
EX1) Find the total cost of an item
priced ____with a sales tax of ___.
Method 1
Step 1 Change % to _______
Step 2 Multiply decimal
and ______
Round to hundredths if necessary
Step 3 Add _________ to
___________ cost
EX2) Find the total cost of an item priced
______with a sales tax of _________.
Method 2
Step 1
Add ______ of tax
to _______
Step 2
Change % to
decimal
Step 3
Multiply decimal
and cost
Step 4
Round to
hundredths if
necessary
Tip (gratuity)- small amount of money in return for
service. Usually a percent of the cost of service.
Same process to solve tax is used to solve tip.
EX3) You want to leave a _____ tip on a bill of _____. How much
is the tip? What is the total cost of bill?
EX4) A phone cost _____with a sales tax of ________. How much
change would you have if you pay the bill with ______.
Markup - percent of increase
A store buys shoes from a manufacturer for _____. The markup is ____.
What is the selling price?
Step 1
Find
______________
Step 2 _____ the markup
to the store cost