Examkin

Question

Difficulty: MediumTaxes and Tips

A family goes out for dinner, and the total cost of their meal is $85.00\$85.00. They use a coupon for 20%20\% off the cost of the meal. A sales tax of 8%8\% is applied to the discounted price. They also decide to leave a 15%15\% tip based on the original pre-discount cost of the meal. What is the total amount the family paid?

  1. A
    $82.95\$82.95
  2. B
    $83.64\$83.64
  3. $86.19\$86.19Answer
  4. D
    $87.55\$87.55

Answer

The total amount the family paid is $86.19\$86.19.
The correct answer accurately separates the bases for the different percentage calculations. The 20%20\% discount reduces the $85.00\$85.00 meal to $68.00\$68.00. The 8%8\% tax is applied to that $68.00\$68.00 base, adding $5.44\$5.44. The 15%15\% tip is calculated on the original $85.00\$85.00 base, adding $12.75\$12.75. The sum of the discounted meal, tax, and tip is $68.00+$5.44+$12.75=$86.19\$68.00 + \$5.44 + \$12.75 = \$86.19.

Step-by-Step Solution

1
Calculate the discount amount and the new discounted price of the meal.
20%20\% of $85.00=0.20×85=$17.00\$85.00 = 0.20 \times 85 = \$17.00. The discounted price is $85.00−$17.00=$68.00\$85.00 - \$17.00 = \$68.00.
The coupon provides a 20%20\% discount on the original meal cost, which must be deducted before applying the sales tax.
2
Calculate the sales tax based on the discounted price.
8%8\% of $68.00=0.08×68=$5.44\$68.00 = 0.08 \times 68 = \$5.44.
The problem states that the sales tax is applied to the discounted price, not the original price.
3
Calculate the tip based on the original pre-discount cost.
15%15\% of $85.00=0.15×85=$12.75\$85.00 = 0.15 \times 85 = \$12.75.
The problem explicitly states that the tip is based on the original pre-discount cost of the meal.
4
Add the discounted price, the sales tax, and the tip to find the total amount paid.
$68.00+$5.44+$12.75=$86.19\$68.00 + \$5.44 + \$12.75 = \$86.19.
The final total is the sum of the actual cost of the meal, the required tax, and the gratuity.

Key Concept

Calculating multi-step financial arithmetic involving discounts, taxes, and tips, ensuring each percentage is applied to the correct base amount.
Rate this question

Topics

Taxes and Tips

More questions from this topic