Calculate Sales Tax and Discounts

Sales tax is a percentage of the purchase price that is added to the total cost of an item, collected by the seller and paid to the government.

To calculate sales tax, multiply the purchase price by the sales tax rate (as a decimal). For example, for a $100 item with a 10% sales tax, the tax is $100 x 0.10 = $10.

Total Cost = Purchase Price + (Purchase Price x Sales Tax Rate).

Total Cost = $50 + ($50 x 0.08) = $54.

A discount is a reduction in the original price of an item, often expressed as a percentage.

Sale Price = Original Price - (Original Price x Discount Rate).

Sale Price = $20 - ($20 x 0.15) = $17.

A tip is a small amount of money given to a server as a reward for good service, usually calculated as a percentage of the total bill.

Tip = Total Bill x Tip Rate. For example, for a $50 bill with a 20% tip, the tip is $50 x 0.20 = $10.

Tip = $30 x 0.15 = $4.50.