A bicycle has a listed price of $503.95 before tax. If the sales tax rate is 7.25%, find the total cost of the bicycle with sales tax included. Round your answer to the nearest cent, as necessary.

Answer 1

One way to solve this problem is to use the tax percentage as a coefficient to multiply the total cost by. In general, you could think of the problem like this,

(Cost with tax) = (1 + Tax%)(Cost without tax)

To write a percentage as a decimal, simply divide by 100

7.25% = 7.25 / 100 = 0.075

So, we can find the total cost with the following equation,

(Cost with tax) = (1 + 0.075)($503.95) = (1.075)($503.95) = $541.75