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?

1 Answer
Apr 30, 2018

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.