Percents are active participants in the world of money.
Everyone "knows" about sales tax. While the price tag on an item indicates its cost, shoppers know that if the item is taxable, the price at the checkout will be more than that shown on the price tag. While sales taxes can vary by location or the taxable situation, all sales taxes are stated in terms of a percent.
Calculating sales tax:
Find 8% sales tax on a purchase of $20.
cost of item = $20.00
sales tax rate = 8% = 0.08
sales tax due = 0.08 x 20 = 1.6
sales tax due = $1.60 |
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Calculating total cost:
Find total cost of a $90 purchase at 8% sales tax.
Sales tax must be
ADDED to the price of the item! |
sales tax due = 0.08 x 90 = 7.2
Total cost = $90.00 + $7.20 = $97.20 |
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Finding % of Sales Tax:
An item costing $12 has $0.48 sales tax.
What is % of sales tax?
0.48 is what % of 12
Answer:
Sales tax = 4% |
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Finding property tax can also be accomplished as a "% of " type of problem.
In Callon county, the annual property tax is 1.2% of the value of the property. If a property is valued at $75,000, what is the annual property tax? $75000 x 0.012 = $900
Tipping Guidelines:
• Restaurant wait staff: 15% to 20% of the bill
• Room service: 20% of the charge
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Taxis: 15% of the fare
• Hairstylist: 10% to 20% of the bill
• Pet Groomer: 10% for short hair dog;
15% for long hair dog;
20% for not well-behaved dog (of the bill) |
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A restaurant bill is $45.80.
What is an appropriate tip at 20%?
What is total bill?
(Do not consider sales tax in this problem.)
Tip: 20% of $45.80 = 0.20 x 45.80 = $9.16
Total Bill: $45.80 + $9.16 = $54.96 |
Note: Most grocery store food items are tax-exempt (no sales tax). Restaurants, which offer a service, charge sales tax.
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When it comes to tipping (especially in a restaurant), 20% is the easiest tipping percentage
to apply, as the math can be done quickly in your head.
• Just double the bill.
• Move the decimal in that answer two places to the left and you have your tip.
• Add the tip to your bill to arrive at the total amount you will need to pay.
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A discount is a reduction made from the value of something. In relation to money, it refers to a reduction from the regular (or list) price, such as offering an item at a ten percent discount.
Everyone loves a sale! And stores know this fact. Periodically, stores will "discount" an item by a percent of the original price. |
Working with a Discount:
• The discount will most likely be a percent.
• Change the % to a decimal.
• Multiply times the original price = amount of discount.
• Subtract from original price = sale price. |
It's on sale!! |
A discount may also be referred to as a markdown.
The amount a store increases the price of an item, is referred to as a markup.
| At the end of the summer season, a store offers a 30% discount on all summer apparel. If a summer jacket's price tag lists $46.90, what will be the discounted amount? What will be the sale price? |
Solution:
30% of $46.90 = discount
0.30 • 46.90 = 14.07
$14.07 is the discount
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The sale price = original price - discount.
$46.90 - $14.07 = $32.83
$32.83 is the sale price |
We have seen the connection between percents and the terms "increasing" and "decreasing". Now, we can extend these terms to working with money amounts.
You normally work at the mall over the spring break for $450. This year the boss tells you that you will be receiving a 7% raise.
a) How much of a raise will you be receiving in dollars and cents?
b) How much will you be earning in total this year? |
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Solution:
Your raise is 7% of your old salary.
Let r = your raise
r = 7% • 450
r = 0.07 • 450 (changing 7% to a decimal)
r = 31.5
a) Your raise (percent of increase) will be $31.50.
b) Your total earnings will be $450 + $31.50 which equals $481.50. |
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