Kris bought a new fur coat for $8,000. She must pay 5% sales tax and 7% excise tax. The furrier is
End of exam
shipping the coat, so Kris must also pay a $15 insurance charge. What is the total purchase price of the
coat?
A. $8,400
B. $8,960
C. $8,560
D. $8,975
D
agree.
To calculate the total purchase price of the coat, we need to add the cost of the coat, the sales tax, the excise tax, and the insurance charge.
Step 1: Calculate the sales tax.
The sales tax is 5% of the coat's cost, which is $8,000. To calculate the sales tax, we multiply the cost by the tax rate: $8,000 * 0.05 = $400.
Step 2: Calculate the excise tax.
The excise tax is 7% of the coat's cost, which is $8,000. To calculate the excise tax, we multiply the cost by the tax rate: $8,000 * 0.07 = $560.
Step 3: Calculate the total purchase price.
We add the cost of the coat ($8,000), the sales tax ($400), the excise tax ($560), and the insurance charge ($15) together: $8,000 + $400 + $560 + $15 = $8,975.
Therefore, the total purchase price of the coat is $8,975. The answer is option D.
To find the total purchase price of the coat, we need to add the cost of the coat, sales tax, excise tax, and insurance charge.
1. Cost of the coat: $8,000
2. Sales tax: 5% of $8,000 = $400
3. Excise tax: 7% of $8,000 = $560
4. Insurance charge: $15
Total purchase price = Cost of the coat + Sales tax + Excise tax + Insurance charge
Total purchase price = $8,000 + $400 + $560 + $15
Total purchase price = $8,975
Therefore, the total purchase price of the coat is $8,975, so the correct answer is option D.