PSAT Math Multiple-Choice Question 593: Answer and Explanation

Question: 593

Calculating the total cost C, including the sales tax (and no other fees), of a good with an untaxed price of P is given by the expression C = 1.07P. How could you calculate the cost of only the sales tax on the good

• A. P
• B. 0.07P
• C. 0.13P
• D. 0.17P

Correct Answer: B

Explanation:

(B) The cost of the sales tax on the good is found by subtracting the untaxed price from the total cost:

1.07P - P = 0.07P

You can also visualize this by plugging in a sample value for the price of the good. A helpful sample value to use with percentages is 100 since it gives easily understood results. If, for example, you suppose that the price of the good is $100, the cost with the sales tax included is 1.07 × $100 = $107. So the sales tax on the good is $107 - $100 = $7. This is equivalent to 0.07 × $100 = $7.