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Question about Tax rate

You have a item that you bought but you lost the sales receipt. There are no price stickers on the item (one of those time saving features for stores) but you remember you gave the clerk $40 and received x in change. Given that the sales tax rate in you state is 6.65%, how would you go about figuring the cost of the item itself? You may have more than one unknown but create a formula for this relationship.

Based on question #1 information and discussion answer the following question: If you returned the item to a store in another state with a different tax rate, what would the tax rate need to be for you to get back more money that you paid out?

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Solution Preview

To solve the first part of the problem, we can think of doing this backwards. Let's call the item price y.

When we have sales tax, the total price would be y*1.0665 (it is 1.0665 because 6.65% is .0665, and then the 1 is for the cost of the item itself). If you ...

Solution Summary

This provides an example of finding out the cost of an item given tax rate and change.