Expert: Wei Chong - 6/22/2008

Question
Can you please explain how to solve the folowing:

If you receive $1500 and you are told that 8.375% tax is already included in this amount how do u solve for the amount that was taxed.  meaning what amount was the original number that was taxed 8.375 which when combined totals 1500.

thank you

Answer
Hi Rhonda,

If I understand your question correctly, $1500 is the total when we add the 'amount before tax' with the 'tax amount'.

With this in mind, here's how we can solve the question:

1) Let B = amount before tax (original number)

2) Since, the tax is 8.375%, the tax amount (the $ that is taxed) is:

    Tax Amount = B*(8.375/100)
                 = 0.08375B

3) Since, $1500 is the total after adding 'B' with 'Tax Amount', we have:

 1500 = B + 0.08375B
 1500 = 1.08375B     <-- we can solve for B by dividing both sides  with 1.08375
 1500/1.08375  = B  
 B = $1384.08 <-- here's the answer


Best Regards,
Wei Chong
http://www.mathexpression.com