Question

You plan to buy $12,000 in computers at a local chain store. There are two stores located about the same distance from your office but in different cities with different tax rates. One city has a tax rate of 7% and the other has a tax rate of 8.5%. What percent can you save by going with the lower tax rate? Round your answer to the nearest tenth of a percent, if necessary.

Answer 1

Lets calculate the taxes that would been payed at each city:
city1 = 12000(7%) = 12000(0.07) = 840
city2 = 12000(8.5%) = 12000(0.085) = 1020
So if you go to city1 instead of city2, you save 1020 - 840 = 180
So you would save $180 from $12000, that is:
 180 out of 12000
= 180/12000
= 0.015
and that is the 1.5%, that is what you could save