If a welding machine costs $9,500 before tax and $10,070 after tax, what percentage is the sales tax?

If a welding machine costs $9,500 before tax and $10,070 after tax, what percentage is the sales tax?

• A. 6%
• B. 5%
• C. 7%
• D. 8%

Answer: (A)

The tax rate is found by comparing how much tax was added to the price before tax. Subtract the pre-tax price from the final price: 10,070 − 9,500 = 570. The tax rate is this tax amount divided by the pre-tax price, then converted to a percentage: (570 ÷ 9,500) × 100 = 0.06 × 100 = 6%. So the sales tax is 6%. You can verify by multiplying the pre-tax amount by 1.06: 9,500 × 1.06 = 10,070, which matches the after-tax price.

The tax rate is found by comparing how much tax was added to the price before tax. Subtract the pre-tax price from the final price: 10,070 − 9,500 = 570. The tax rate is this tax amount divided by the pre-tax price, then converted to a percentage: (570 ÷ 9,500) × 100 = 0.06 × 100 = 6%. So the sales tax is 6%. You can verify by multiplying the pre-tax amount by 1.06: 9,500 × 1.06 = 10,070, which matches the after-tax price.