Question

If I paid $20 (after tax) for a new sweater, what was the price before tax if the tax rate was 4%. Round your answer to the nearest cent.

Answer 1

Let the price before tax = x

The tax rate = 4% = 4/100 = 0.04

So, the total price = x + 0.04 x = 1.04 x

Given : the price after tax = $20

So, 1.04 x = 20

solve for x:

$\begin{gathered} 1.04\cdot x=20 \\ \\ x=\frac{20}{1.04}=19.2308 \end{gathered}$

Rounding the answer to nearest cent

So, the price before tax = $19.23