Question 770283: I paid $100 for an item. 12% tax was included in the price. What is the formula for finding the hidden tax on the item and the tax amount I actually paid?
Answer by nerdybill(7384)   (Show Source):
You can put this solution on YOUR website! I paid $100 for an item. 12% tax was included in the price. What is the formula for finding the hidden tax on the item and the tax amount I actually paid?
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"Amount paid" = "cost of item" + "amount of tax"
"Amount paid" = "cost of item" + .12("cost of item")
or, factoring out "cost of item" on right:
"Amount paid" = "cost of item"(1 + .12)
"Amount paid" = (1.12)"cost of item"
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using:
"Amount paid" = (1.12)"cost of item"
plug in what you know:
100 = (1.12)"cost of item"
100/1.12 = "cost of item"
$89.29 = "cost of item"
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Two ways to find tax:
"amount paid" - "cost of item":
100 - 89.29
$10.71 (tax)
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OR,
"tax rate" * "cost of item"
.12("cost of item")
.12(89.29)
$10.71 (tax)
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