Customer: “If I purchase this product for 9.99 and $7.00, how much would I owe after the 8.75% tax is applied?
The correct answer and explanation is:
To calculate the total amount owed after applying an 8.75% tax to the purchase of $9.99 and $7.00, follow these steps:
Step 1: Add the prices
9.99+7.00=16.999.99 + 7.00 = 16.99
Step 2: Calculate the sales tax
8.75% of 16.99=0.0875×16.99≈1.4866258.75\% \text{ of } 16.99 = 0.0875 \times 16.99 \approx 1.486625
Step 3: Add the tax to the original total
16.99+1.486625≈18.4816.99 + 1.486625 \approx 18.48
✅ Final Answer: $18.48
📘 Explanation (300 words):
When a customer purchases products subject to sales tax, the tax is calculated as a percentage of the total purchase price before tax. In this case, the customer is buying two products: one for $9.99 and another for $7.00. The first step is to add those two prices together to find the subtotal, which is $16.99.
Next, the sales tax rate is 8.75%. To find how much tax applies, you multiply the subtotal by the tax rate in decimal form. To convert 8.75% to a decimal, divide by 100, which gives 0.0875. Multiply $16.99 by 0.0875, and you get approximately $1.49 (rounded to two decimal places, since money is typically expressed in dollars and cents).
Now, to determine the total amount the customer owes, add the tax amount to the original subtotal. That means adding $1.49 to $16.99, which gives a final total of approximately $18.48.
It’s important to understand that sales tax varies by location, but the method of calculation remains the same: Subtotal × Tax Rate = Tax, then Subtotal + Tax = Total Price. This ensures the customer pays the correct total cost, including the legally required tax. Always double-check your multiplication and rounding, especially when dealing with money.
Thus, for a purchase of $9.99 and $7.00, with 8.75% tax, the total amount owed is $18.48.