2-6 Sales Tax, Tips, and Markup

Sales tax is an additional amount of money charged on items that people buy!

Fun Fact 1: Pennsylvania's sales tax of 6% is considered a medium rate...

Fun Fact 2: Tennessee has the highest sales tax rate of 9.53% (Updated Jan. 15 2020!)

Drew wants to buy exercise equipment that costs $140 and the sales tax is 5.75%. What is the total cost of the equipment?

Step 1: Find the sales tax!! To do this, we multiply the decimal form of the % by the cost of the item

$140 * 0.0575 = 8.05

Step 2: Add the sales tax to the cost of the item!

$140 + $8.05 = $148.05

So the total cost is $148.05 after sales tax!

Tips or Gratuity is a small amount of money in return for a service.

The total price is the regular price of the service PLUS the tip!

Fun Fact: It is common to tip your servers 20%... just saying! :)

A customer wants to tip 15% on a restaurant bill that is $35. What will be the total bill with the tip?

Step 1: Find the amount to tip! We do this by taking the decimal from of the % and multiplying it by the bill amount.

$35 * 0.15 = $5.25

Step 2: Add the tip to the total of the bill!

$35 + $5.25 = $40.25

So the total bill is $40.25

A markup is a percent INCREASE on an item!

A store buys a phone for $600 and wants to sell it with a markup of 35%. What is the selling price of the phone?

Step 1: Find the amount of markup (take the money amount and multiply it by the decimal of the percentage)

$600 * 0.35 = $210

Step 2: ADD the amount of markup to the original price.

$600 + $210 = $810 selling price!