Question

Jack Matthew bought a new diamond ring for $20,000. Sales tax is 5% with a 10% excise tax. The total price including taxes that Jack paid is?

Answer 1

Jack paid $ 23000 for the ring.

Solution:

Given that, Jack Matthew bought a new diamond ring for $20,000

Sales tax is 5% with a 10% excise tax

To find: total price including taxes

Given that sales tax is 5% of 20,000

$\begin{array}{l}{\text { Sales tax }=5 \% \times \text { cost price }} \\\\ {\text { Sales tax }=\frac{5}{100} \times 20000=5 \times 200=1000}\end{array}$

Also given that excise tax is 10%

$\begin{array}{l}{\text { Excise tax }=10 \% \times \text {cost price }} \\\\ {\text { Excise tax }=\frac{10}{100} \times 20000=10 \times 200=2000}\end{array}$

Total price = cost price + sales tax + excise tax

Total price = 20,000 + 1000 + 2000

Total price = 23000

Hence, jack paid $ 23000 for the ring.