Question

There are federal excise taxes on the retail price when purchasing fishing equipment. the taxes are intended to help pay for parks and conservation. what is the federal excise tax rate if there is an excise tax of $17.50 on a fishing rod and reel that has a retail price of $175?

Answer 1

Using proportions, it is found that the federal tax rate is of 10%.

What is a proportion?

A proportion is a fraction of a total amount, and the measures are related using a rule of three.

The tax rate is the proportion that $17.50 is of $175, hence:

r = 17.50/175 = 0.1 = 10%.

The federal tax rate is of 10%.

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