Answer:
No
Step-by-step explanation:
We first write out $17,500 as a multiplication to 5%
New price = 17500 x 1.05 = 18375 = $18,375
18375-17500 = 875
We then work out the tax on just the mark up of $875 increase
20% mark up = 875 x 0.20 = 175
18.375+175 = 18550
= $18,550 charge to be considered for 5%
However Monte would argue that tax on tax also applies to 875 x 1.20 = 1050
=$1050 and he is just asking to meet half tax costs an extra 10% of his own tax back of 17.500 x 20% that he paid = 17500 x 0.20 = 3500
tax he paid inclusive or non inclusive would be the same.
= $3500
10% of this = 3500 x 0.10 = 350
18550+350 = 18,900
Therefore it is not dishonest if mentioned in the terms and conditions.
We also universally can round 5% up by applying other charges to include promotion costs and even apply more for administration costs.
