# Sales Tax in a Bill

We will discuss here how to calculate the sales tax in a bill.

1. Jack bought the following electrical items from a shop.

 Items: Fans Lamps Switches Tubes Electric wire Quantity: 4 2 dozens 5 dozens 6 230 metres Rate: $675 each$ 110/Dozen $41/Dozen$ 135 each $2.50/ metre If the sales tax is charged at the rate of 7% on all these items, find the total amount paid by Jack. Solution: Cost of 4 fans =$ (675 x 4) = $2,700 Cost of 2 dozen lamps =$ (110 x 2) = $220 Cost of 5 dozen switches =$(41 x 5) = $205 Cost of 6 tubes =$(135 x 6) = $810 Cost of 230 meter of wire =$ (2.50 x 230) = $575 Therefore, the total cost of all items =$ 2,700 + $220 +$ 205 + $810 +$ 575 = $4,510 Therefore, sales tax at the rate of 7% =$ (4510 x $$\frac{7}{100}$$) = $315.70 Therefore, total amount paid by Jack =$ 4,510 + $315.70 =$ 4,825.70

2. Richard bought the following goods from a departmental store.

 Commodity: Cosmetics Medicines Bakery products Stationery Marked price: $450$ 250 $103$ 185 Rate of sales tax: 10% 8% Nil 5%

Find the total amount Richard had to pay for the commodities. How much did she pays as sales tax.

Solution:

For cosmetics; here, the marked price P = $450, the rate of sales tax = 10%, i.e. r = 10 Therefore, S = P(1 + $$\frac{r}{100}$$) S =$ 450 × (1 + $$\frac{10}{100}$$)

= $450 × ($$\frac{11}{10}$$) =$ 495

For medicines; here, the marked price P = $250, the rate of sales tax = 8%, i.e. r = 8 Therefore, S = P(1 + $$\frac{r}{100}$$) S =$ 250 × (1 + $$\frac{8}{100}$$)

= $250 × ($$\frac{27}{25}$$) =$ 270

For bakery products; here S = P = $103, as there is no sales tax For stationery; here, the marked price P =$185, the rate of sales tax = 5%, i.e. r = 5

Therefore, S = P(1 + $$\frac{r}{100}$$)

S = $185 × (1 + $$\frac{5}{100}$$) =$ 185 × ($$\frac{21}{10}$$)

= $194.25 Therefore, the total amount paid =$495 + $270 +$103 + $194.25 =$ 1062.25

The total amount of sales tax paid = ($495 -$450) + ($270 -$250) + 0 + ($194.25 -$ 185)

= $45 +$20 + 0 + $9.25 =$74.25

● Sales Tax and Value Added Tax