Question

A buyer values a house at $525,000 and a seller values the same house at $485,000. If sales tax is 8% and is levied on the buyer, then, what would be the highest price that the buyer would be willing to pay

Answer 1

The highest amount that the buyer will have to pay is the final sale value price plus the value of the sales tax. In this case, the buyer will be paying $523,800 for the house.

What is Sales Tax?

Sales tax refers to a form of tax levied with the aid of using the government while commodities are bought withinside the market.

The burden of the sales tax falls on the vendor however is in the end paid with the aid of using the consumer. It may be categorized as an indirect tax.

Given information:

Cost price by buyer = $525000

Selling price by seller = $485000

Sales tax = 8%

Sales tax amount = selling price x sales tax percentage

                            = $485000 * 0.08

                             = $38800

Selling price = $485000 + $38800 = $523,800

Therefore, The highest amount that the buyer will have to pay is the final sale value price plus the value of the sales tax. In this case, the buyer will be paying $523,800 for the house.

Learn more about Sales tax:

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