There are many applications that involve the use of percent.  In this lesson we will learn how to solve problems which involve finding a "tax".  It could be a "sales" tax, it could be an "income" tax, it could be a "property" tax. 
As you will see, although there are many different types of taxes, they are all calculated using the same method.
 

Finding a "tax" Step 1:  Change the percent number to a decimal number. Step 2:  Multiply the amount being "taxed" by the decimal number. Step 3:  Round off all products to the nearest hundredths place (the "pennies" place)

 

Example: Jan purchased a new sweater which sells for $39.90. The "sales" tax rate in her city is 8 1/2%. What is the amount of the sales tax which Jan must pay in addition to the cost of the sweater? Solution: Step 1:  Change 8 1/2% to a decimal.  Move the decimal point 2 places to the left. 8 1/2% = .085 Step 2:  Multiply (39.90) by (.085) (39.90)(.085) = 3.3915 Step 3:  Round off to the nearest hundredths place 3.3915 ≈ 3.39 Jan must pay an additional $3.39 in sales tax.

 

Let's look at another example: Bob must pay income tax of 14.7%. Last year Bob earned $98,500.00 How much income tax must Bob pay? Solution: Step 1:  Change 14.7% to a decimal number 14.7% = .147 Step 2:  Multiply (98,500) by (.147) (98,500)(.147) = 14,479.50 Step 3:  Round off to nearest hundredths place No rounding is necessary in this product. Bob must pay $14,479.50 in income tax.

 

One last example: Mary and Tom own a home which is valued at $165,000. The property tax rate in their city is 2.568% What is the property tax on their home? Solution: Step 1:  Change 2.568% to a decimal number 2.568% = .02568 Step 2: Multiply the value of the home by the decimal number (165,000)(.02568) = 4237.20 Step 3:  Round off to the nearest hundredths place No rounding is necessary Mary and Tom must pay $4237.20 in property tax.

 As you can see, although there are a variety of different "taxes" they are all calculated using the same method.