Expert: Bobby Soltani - 10/7/2005

Question
Price + Tax = Total, If Price is $10 and Tax is 9.5% and this equals $10.95. What would be the formula for finding the Price if unkown. You know you paid $10.95 and know tax is 9.5%. I was taught this in school but have forgotten the formula. Can You help?

Answer
Hi Chris,

We can solve your problem using the formula you first wrote.

P + t = Total

tax is equal to P*r, where r is the tax rate.  So, we can write

P + P*r = Total
factor out the P.
P(1 + r) = Total
divided both sides by (1 + r)
P = Total/(1 + r)

For your problem, Total = 10.95 and r = 0.095, so
P = 10.95/1.095
P = 10 dollars

Let me know if you have any questions.

Bobby