Calculate the original nightly cost before sales tax
What is the original nightly cost of an inn before sales tax is added if the total cost including an 8% tax is $122.04?
Choose one:
a. $113
b. $120
c. $125
Answer:
The original nightly cost of the inn before sales tax is added is $113.
To calculate the original nightly cost before sales tax is added, we need to reverse the percentage increase caused by the sales tax. The total cost including sales tax (which is 8%) is $122.04, and we want to find the original price before the tax.
Let's denote the original price as P. Since 8% sales tax is added to the original price, we can express the total cost as P + (0.08 × P) = 1.08P. Therefore, the equation to find the original price is:
1.08P = $122.04
To find P, divide both sides of the equation by 1.08:
P = $122.04 / 1.08
Upon calculation:
P = $113
So, the original nightly cost before tax is added is $113.