Expert: Josh - 12/10/2009

Question
I forgot the formula....  Example,,, If a product cost $1785. after an .865 tax, how do I figure the cost of the idem before the tax????  I can't remember!!!!!   I know what the answer is through trial & error but I need to know the formula... I tried to remember but failed....   Thanks!!!!!

Answer
Hi Bob,

I'm not sure what your tax figure actually mean.
For the sake of discussion, let's suppose the price tag $1785.00 already included 8.65% tax. Then, the item before tax is calculated by 1785/(1+0.0865). In this case, it costs $1642.89.

In general, let
R be the tax given as a percentage;
B be the cost before tax;
A be the cost after tax.

Then, B=A/(1+(R/100))

e.g., if an item costs $1100 (including 10% tax)
B=1100/(1+0.10)=$1000