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Question

Difficulty: MediumTaxes and Tips

Read the scenario and perform the necessary calculations. Enter the exact numerical values in the blanks.

Answer:A customer purchases a premium spa package for $250.00\$250.00. The local municipality applies a 6%6\% sales tax to the base price of all spa services. After the tax is added, the customer decides to leave a 20%20\% tip based on the new, post-tax total on the receipt.

The amount of the tip is $【53】\$【53】 and the final total cost paid by the customer is $【318】\$【318】.

Answer

The amount of the tip is 53 (or 53.00) and the final total cost is 318 (or 318.00).
The correct amounts are found by sequentially applying the percentages according to the narrative. First, a 6%6\% tax on the $250.00\$250.00 base price adds $15.00\$15.00, resulting in a $265.00\$265.00 subtotal. The 20%20\% tip is then applied to this $265.00\$265.00 subtotal, resulting in a $53.00\$53.00 tip. Adding this tip to the subtotal gives the final cost of $318.00\$318.00.

Step-by-Step Solution

1
Calculate the sales tax amount on the base price.
$15.00\$15.00
Multiply the base price ($250.00\$250.00) by the tax rate (0.060.06).
2
Determine the post-tax total.
$265.00\$265.00
Add the tax amount ($15.00\$15.00) to the base price ($250.00\$250.00) to find the amount upon which the tip will be calculated.
3
Calculate the tip amount.
$53.00\$53.00
Multiply the post-tax total ($265.00\$265.00) by the tip rate (0.200.20).
4
Calculate the final total cost.
$318.00\$318.00
Add the tip amount ($53.00\$53.00) to the post-tax total ($265.00\$265.00).

Key Concept

Calculating sales tax on a base price and applying a tip percentage to the sequential post-tax total.
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Topics

Taxes and Tips

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