The city of Savannah recently increased their sales tax from 7% to 8%. How much more tax will you pay on a $20 purchase?
The tax rate increased from 7% to 8%, which implies an increase of 1%.
For a $20 purchase, the amount of tax you would pay at a 7% tax rate would be:
7% of $20 = 0.07 x 20 = $1.40
At an 8% tax rate, the tax you need to pay will be:
8% of $20 = 0.08 x 20 = $1.60
Hence, the increase in tax you need to pay on a $20 purchase is:
$1.60 - $1.40 = $0.20