The city of Savannah recently increased their sales tax from 7% to 8%. How much more tax will you pay on a $20 purchase?
Responses
A $0.20
B $0.80
C $0.75
D $1.60
E $0.10
The correct answer is B) $0.80.
To calculate the increase in tax, first find the difference between the old tax rate and the new tax rate: 8% - 7% = 1%.
Next, multiply this percentage by the cost of the item to find the amount of the increase: 1% x $20 = $0.20.
Therefore, the total tax amount for the $20 purchase will be $0.20 + the original tax amount of $0.60 (7% of $20) = $0.80.