N O T E S A N D E X A M P L E S

TAX, TIP, AND MARKUP

WHAT IS SALES TAX?

• * a state government tax charged for certain goods and services.

• * It is normally a percentage. It is added to the purchase price or retail price of the item or service.

HOW DO I CALCULATE TAX?

• EXAMPLE: Georgia’s sales tax is 7%. (7% = 0.07)

• *HINT : For every $1 – $0.07 is added.

• You can find the total price by multiplying your purchase price by 1.07 (or the equivalent for local sales tax)

A BOOK IS $10. THERE IS 7% SALES TAX ON THE BOOK. WHAT IS THE TOTAL?

• 10.00 x 1.07. The book cost ______________.

WHAT IS TIP?

• * a percent earned by a person providing service• EX: waitress, deliveries

HOW DO I CALCULATE TIP?

• You calculate tip by finding the % of a number.• EX: Your food bill at Chilies was $23.50. You

leave a 15% tip. What is the total cost of the meal?

WHAT IS A MARKUP? WHAT IS RETAIL PRICE?

• * a percent or amount of increase a retail store charges to earn a profit.

• WHAT IS RETAIL PRICE?• * The price at which a store sells items to

customers.

• Retail price = wholesale price + markup

HOW DO I FIND RETAIL PRICE?

• Example: wholesale price = $50• percent markup = 30%

• Markup = .30 x $50• = $15

• Retail price = $50 + $15• = $65

• The retail price is $65.