Question

Calculate the total cost of an item bought at a negotiated price of $15,640 and a $2,500 trade-in allowance. The sales tax is 7.2 with a $106 registration fee.

$13,160
$14,372.08
$1,232.08
$14,286.08

Answer 1

The total cost of the item is the second choice which is $14,372.08. I arrived to the answer by simply:

1) multiplying the sales tax to the negotiated price (15640*.072 = 1126.08)
2) adding the sales tax to the negotiated price and the registration as well (15640+1126.08+106= 16872.08)
3) subtracting the trade in allowance from the computed value (16872.08 - 2500 = 14372.08)