math, math education, Math Education

Calculate Taxes and Tips

When you buy food at the grocery store, you will often find that the price is more than what is on the sticker price. That extra money you pay is the sales tax. In the United States, different states and cities charge different amount of sales tax.

Take a look at this receipt from a recent trip to Shakeys. How much did I pay in sales tax?

I paid $0.88 in sales tax. Therefore, even though the stated price of the lunch buffet was $9.29, I ended up paying a total of $10.17. Based on this information, what tax rate did I pay?

1. Divide the amount of tax (.88) by the original price/subtotal.

0.88/9.29= 0.09472551

2. Multiply the answer (0.09472551) by 100, round to nearest tenth and add a percentage sign

0.09472551 x 100 (with rounding) = 9.5%

Therefore, I paid a tax rate of 9.5%.

Now, let’s look at an example where we are given the price and sales tax. It is up to us to find the total cost of the items. Calculating the cost of the lamp is pretty easy: add the price of the item with the sales tax to get the total.

$25.00 + $1.50 = $26.50

The lamp costs $26.50.

Using the previous process, first, calculate the sales tax rate. It calculates out to 6%.

Multiply the decimal form of the sales tax (0.06) with the price of the gum.

1.00 x 0.06 = 0.06. Then, add this to the price of the item.

$1.00 + $0.06 = $1.06. The gum cost $1.06 in total!

Practice calculating the cost of the laundry soap on your own. Afterwards, fill out the following table:

Now, let’s talk tips. Here in America, it is customary to give extra money to waitress, waiters, drivers, hairdressers, hospitality staff and baristas. That money, known as tips, or gratuity, must be calculated on top of the subtotal.

In the previous example, I tipped the waitress at Shakey’s $2.00. What percentage of the subtotal is the tip?

1. Divide the tip and the subtotal and multiply the answer by 100.

2/9.29= 0.21528525 x 100 = 21.5295253

2. Round to the nearest whole number and add a percentage sign.

That day, I tipped at a rate of 22%.

Now, time for a challenge! It is a common debate to wonder how much someone should tip. But how much does it make a difference to the bottom line?

Dave used to spend $30 dollars for food and drinks at his local bar every week, and would tip an additional 20%. However, he has now lost his job, and so is tipping less than normal. He now only tips at a 10% rate. How much less is he spending on a weekly basis?

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