Question

How can you determine the total cost of an item including tax if you know the price of the item and the tax rate?

Answer 1

Hint: In this question we have been asked to find the total cost of an item including the tax given that we know the tax rate of the item. To begin solving this question we will first find the total tax on the item using the tax rate of the item. To get the total cost of the item we will add both the values of the cost of the item and the tax value of that item. We will understand this question by using an example.

Complete step by step solution:
Suppose the cost of an item is $100$ units and the tax rate for that item is $5\%$.
It is to be remembered that the tax rate is given in percentage, to calculate the tax, we will multiply both the values.
On multiplying, we get:
$\Rightarrow 100\times 5\%$
on writing the percentage in the form of a fraction, we get:
$\Rightarrow 100\times \dfrac{5}{100}$
On simplifying, we get:
$\Rightarrow 5$, which is the tax on the item.
Now to get the total cost of the item we will add the cost of the item with the tax. On adding, we get:
$\Rightarrow 100+5$
On simplifying, we get:
$\Rightarrow 105$, which is the total cost of the item.

Note: The alternate method to calculate the total cost is by adding $1$ to the tax rate and multiply it by the cost of the item. For example, as per the above question we can multiply $100$ by the term $1+0.05$ which is $100\times 1.05$ to get the same total cost.