Question

How do you find sales tax?

Answer 1

Hint: To answer this question, we define what sales tax is first and give an explanation regarding the same. Then, we give an example to show the sales tax and how to calculate it giving a few basic formulae.

Complete step by step solution:
The given question requires us to explain how to calculate the sales tax for a particular scenario. In order to do so, we first explain what sales tax is. Sales tax is defined as the tax or revenue that the government levies on good sold in that region. It is usually a small percentage of the total selling price of the goods. The government uses this money to meet their governing or administrative expenses. It is generally represented as a percentage and is usually small. It is calculated over the selling price or in other words it is the excess over the selling price which the buyer needs to pay for the commodity or goods.
To explain this concept let us take an example. Let us consider the marked of an article as $\$100.$ Let the rate of sales tax for the given article be given as $10\%.$ To calculate the selling price, we use the formula,
$\Rightarrow S.P=P\left( 1+\dfrac{r}{100} \right)$
Here, the selling price is nothing but the price the buyer pays to buy the article. P is the marked price of the article. r is the rate of sales tax. Substituting these values,
$\Rightarrow S.P=100\left( 1+\dfrac{10}{100} \right)$
Taking LCM of the terms inside the brackets,
$\Rightarrow S.P=100\left( \dfrac{100+10}{100} \right)$
Cancelling the 100 in the numerator and denominator,
$\Rightarrow S.P=110$
This is the final price the buyer pays to get the article. In order to calculate the sales tax now, we subtract the amount he pays and the marked price of the article. It is the excess amount he pays which is the sales tax.
$\Rightarrow Tax=S.P-P$
Substituting the values and subtracting,
$\Rightarrow Tax=110-100=\$10$
Hence the sales tax in this case is $\$10.$ We can directly calculate the sales tax by multiplying the rate of sales tax by the marked price of the article.
$\Rightarrow Tax=P\times \dfrac{r}{100}$
Substituting the values and solving,
$\Rightarrow Tax=100\times \dfrac{10}{100}=\$10$
We can see that the value is the same. Hence, we have shown how to calculate the sales tax for a general case.

Note: Students need to have a good knowledge in the topics of profit, loss and tax for a better understanding and to solve such sums easily. Another method to directly calculate the sales tax is by checking the extra money that the buyer pays over the marked price of the article in order to obtain the product or goods. There are many such ways and it depends on the scenario in which it should be calculated.