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Difficulty: MediumDiscounts and Sale Prices

A landscaping company is purchasing a bulk order of premium grass seed. The wholesale price of the order is $550\$550. The supplier offers a 20%20\% commercial discount on the order. After the discount is applied, a 5%5\% sales tax is added. What is the final total cost of the grass seed order?

  1. $462.00\$462.00Answer
  2. B
    $467.50\$467.50
  3. C
    $556.50\$556.50
  4. D
    $115.50\$115.50

Answer

The final total cost of the grass seed order is $462.00\$462.00.
The correct answer is found by completing the calculation in two distinct steps. First, apply the 20%20\% discount to the original $550\$550 price ($550×0.80=$440\$550 \times 0.80 = \$440). Second, calculate the 5%5\% sales tax on the new $440\$440 balance and add it to the cost ($440×1.05=$462.00\$440 \times 1.05 = \$462.00).

Step-by-Step Solution

1
Calculate the discount amount by finding 20%20\% of $550\$550.
$550×0.20=$110\$550 \times 0.20 = \$110
The commercial discount reduces the original wholesale price by a percentage.
2
Subtract the discount amount from the original price to find the sale price.
$550−$110=$440\$550 - \$110 = \$440
This establishes the actual price of the grass seed before sales tax is applied.
3
Calculate the 5%5\% sales tax on the discounted sale price.
$440×0.05=$22\$440 \times 0.05 = \$22
Sales tax must be applied to the final sale price, not the original sticker price.
4
Add the sales tax to the sale price to find the final total cost.
$440+$22=$462.00\$440 + \$22 = \$462.00
The final cost includes both the discounted price and the applicable tax.

Key Concept

Calculating multi-step financial arithmetic problems involving sequential discounts and sales taxes.
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Topics

Discounts and Sale Prices

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