Question

You plan to buy $12,000 in computers at a local chain store. There are two stores located about the same distance from your office but in different cities with different tax rates. One city has a tax rate of 7% and the other has a tax rate of 8.5%.What percent can you save by going with the lower tax rate?

Answer 1

The percentage saved is 1.5% .

Explanation:

As given

You plan to buy $12,000 in computers at a local chain store. There are two stores located about the same distance from your office but in different cities with different tax rates.

One city has a tax rate of 7% and the other has a tax rate of 8.5%.

As

7% is written in the decimal form .

`= (7)/(100)`

= 0.07

Tax price at 7% tax rate = 0.07 × Cost of the computer

= 0.07 × 12000

= $ 840

8.5% is written in the decimal form .

`= (8.5)/(100)`

= 0.085

Tax price with 8.5% tax rate = 0.085 × Cost of the computer

= 0.085 × 12000

= 1020

Change in the tax rate = Tax price with 8.5% tax rate - Tax price at 7% tax rate.

= 1020 - 840

= $180

`Pecentage\ saved = (Change\ in\ the\ tax\ rate* 100)/(Cost\ of\ the\ computers)`

`Pecentage\ saved = (180* 100)/(12000)`

`Pecentage\ saved = (18000)/(12000)`

Percentage saved = 1.5%

Therefore the percentage saved is 1.5% .

Answer 2

We are given two stores to select and this stores are located in the same distance but of different cities of different tax rates. One city has a tax rate of 7% and the other city has a 8.5%. in order to save, you need to choose a lower tax rate which is 7%. This saves you 1.5% as compared 8.5% of other city