Math in Shopping

Shopping can include math in many areas: such as sales tax, discounts, and profit margin.

• Sales tax is found by multiplying the cost of the item by the tax rate.
• Discounts are found by multiplying the rate by the original price. To calculate the sale price, subtract the discount from original price.
• Profit margin is the amount by which revenue from sales exceeds costs in a business.

Change the sales tax into decimal form. For instance:

7.5% sales tax becomes .075 in decimal form

3.4% sales tax becomes .034 in decimal form

5% sales tax becomes .05 in decimal form

Formula: Item or service cost x sales tax (in decimal form) = total sales tax.

Sample calculation: $60 (item cost) x .075 (sales tax) = $4.50 total sales tax

Once you've calculated sales tax, make sure to add it to the original cost to get the total cost.

The profit margin formula is net income divided by net sales.

Net sales is gross sales minus discounts, returns, and allowances.

Net income is total revenue minus expenses.

This page by: Demian G. ('21)