You just paid $42.40 including tax, for your cousin's birthday present. Sales tax is 6%. What is the retail price of the gift?
my answer: $40 is the retail price
I get 39.85
1.06x = 42.40
I get 40 too.
To find the retail price of the gift, we need to reverse calculate the amount before tax. Here's how you can do it:
Step 1: Convert the tax rate percentage to decimal form. In this case, the sales tax is 6%, so we convert it to 0.06.
Step 2: Divide the total amount paid by 1 plus the decimal form of the sales tax. This accounts for the tax portion of the total price and calculates the original amount before tax.
Retail price before tax = Total amount paid / (1 + Tax rate)
In this case, the total amount paid is $42.40, and the tax rate in decimal form is 0.06.
Retail price before tax = $42.40 / (1 + 0.06)
Step 3: Calculate the retail price before tax.
Retail price before tax = $42.40 / 1.06 = $40
Therefore, the retail price of the gift before tax is $40.