Question

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

Answer 1

See explanation

Explanation:

Add the price of the item and the tax on the item, or multiply the price of the item by the tax rate plus `1` (to include the price of the item).

Let's say the cost of an item is `100` dollars and the tax rate is `5%`, or `0.05`. To get the amount of tax that has to be paid on the `$100` item, multiply `100` by `0.05` to get `5`.

Add the amount of the tax (`$5`) to the price of the item (`$100`) to get a total cost of `$105`.

Or you could multiply `100` by `1+0.05` or `1.05` to get the same answer. The reason why the `1` can be added in is because the total cost includes the price of the item, not just the sales tax on it.