Digital PSAT Math Practice Question 178: Answer and Explanation

Question: 178

Allison is purchasing a new car that costs $25,000. She is trading in a used car that is worth $5,000, according to the dealer. The amount she pays for the new car is the new car price minus the amount she receives as a credit for the used car trade-in. If she has to pay 7% sales tax on the entire purchase, what expression would give the total amount she pays?

• A. 0.07(25,000 - 5,000)
• B. 0.07(25,000) + 5,000
• C. 1.07(25,000 - 5,000)
• D. 1.7(25,000 + 5,000)

Correct Answer: C

Explanation:

(C) The total price on which the sales tax will be applied is $25,000 - $5,000, since the new car is $25,000 and Allison receives $5,000 on the trade-in. To calculate the total after the sales tax is applied, take 100% of (25,000 - 5,000) and add 7% to it. Move the decimal point to the left two spots for each percentage: 100% becomes 1.00 and 7% becomes 0.07. So, multiply (25,000 - 5,000) by 1.07 to get the correct answer: 1.07(25,000 - 5,000).