The after-tax price of a shiny new car is $19,000. If 8% sales tax was charged, what was the pre-tax price of the car?
If the pre-tax price is p, then we have
1.08p = 19000
(100% + 8%) x = 19000
1.08 x = 19000
$17,592.59 ?
Yes, $17592.59, to the nearest cent.
To determine the pre-tax price of the car, we need to reverse calculate the amount of tax that was charged. We know that the after-tax price of the car is $19,000, and that this price includes 8% sales tax.
To find the amount of sales tax that was charged, we can use the formula:
Sales Tax = After-Tax Price * Tax Rate
Given that the tax rate is 8%, we can substitute these values into the formula:
Sales Tax = $19,000 * 0.08 = $1,520
Now that we know the amount of sales tax that was charged, we can subtract it from the after-tax price to find the pre-tax price of the car:
Pre-Tax Price = After-Tax Price - Sales Tax
Pre-Tax Price = $19,000 - $1,520 = $17,480
Therefore, the pre-tax price of the car is $17,480.