Expert: Lynn Houston - 11/22/2008

Question
I'm not sure on how to add the tax in exactly.
Here's the problem:
Ms. Munch bought a watch with the regular price of $129. It was on sale at a 20% discount. There was 6% tax on the sale price. How much to Ms. Munch spend to buy the watch?


Answer
You add the tax in after you take of the discount.

(129-(129(.2)))*1.06= $109.39

The above is the watch price (129) minus the 20% discount (129*.2), then that qty, times 1.06 (the tax).  There are two ways of doing the tax.  If the question wanted to know the amount of the tax, then you would have taken 103.2 (the price of watch after the discount) and multiplied by .06.  That would give you the amount of the tax (6.19)and then to get the total price, you'd have to add that to the 103.20  However, since you just needed the total price, if you multiply by 1.06 (or 1. whatever the tax rate is), then you've already "added" the original price in (by multiplying by 1)