Results 1 to 4 of 4

Math Help - Basic math calculation

  1. #1
    Junior Member
    Joined
    May 2009
    Posts
    29

    Lightbulb Basic math calculation

    I'm doing a problem that's are tax inclusive & exclusive. Finding tax.

    Doing a basic example involving $100 including tax. tax rate is 15%.

    I was taught at school this method.

    100 - 15 = 85
    .85 * 100 = 85 and therefore tax is $15.

    Then $85 (excluding tax). If I wanted to go back to tax inclusive you add 15% on top of cost price.

    Therefore, 85 * 1.15 = 97.75
    It doesn't come back to the correct amount tax inclusive of $100.

    WHY?

    Here is the proper calculation formula I was given to use. 100 * (3/23)

    and yes that method is right.

    Because that method is correct, can anyone explain to me algebraically as to how they derived the formula: Price (tax inclusive) * (3/23) based on a 15% tax rate and why isn't my old method not correct?

    Thanks
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Junior Member BERMES39's Avatar
    Joined
    Aug 2011
    Posts
    41

    Re: Basic math calculation

    An item M plus 15% tax is $100.
    M(1+0.15) = M*1.15 = 100
    M = 100/1.15 = 86.95 (not 85)

    The fraction 3/23 only works for 15%
    Follow Math Help Forum on Facebook and Google+

  3. #3
    Super Member Bacterius's Avatar
    Joined
    Nov 2009
    From
    Wellington
    Posts
    927

    Re: Basic math calculation

    It's because 15% of $100 is not the same amount as 15% of $85. To reverse the tax, and thus reverse the multiplication by 0.85, you must multiply by \frac{1 }{0.85} which turns out to be 1.17647 rounded, not quite 1.15. Which explains why you don't get the $100 total back.

    Now note that \frac{3}{23} = \frac{15}{115}, can you notice something?
    Follow Math Help Forum on Facebook and Google+

  4. #4
    MHF Contributor

    Joined
    Apr 2005
    Posts
    15,707
    Thanks
    1470

    Re: Basic math calculation

    As Bacterius said, with percents you always have to consider the "base". The tax on a purchase is 15% of the price without the tax added, then add the tax to get the price with tax. Here, you do not know, but want to find, the purchase price without the tax. If we call that price "P", the we have 15% of P or 0.15P. To find the price with the the tax, add P and 0.15P: P+ 0.15P= (1+ 0.15)P= 1.15P. You are told that the price "including tax" is $100 so you have 1.15P= 100. You can find the price without tax by dividing both sides by 1.15.
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Very basic geometric growth calculation...
    Posted in the Business Math Forum
    Replies: 2
    Last Post: September 27th 2010, 07:57 AM
  2. Basic calculation!
    Posted in the Algebra Forum
    Replies: 2
    Last Post: June 28th 2010, 04:08 PM
  3. Replies: 3
    Last Post: March 29th 2010, 02:10 PM
  4. Basic loan calculation word problem
    Posted in the Algebra Forum
    Replies: 3
    Last Post: February 24th 2010, 06:12 PM
  5. Basic Standard Deviation Calculation
    Posted in the Statistics Forum
    Replies: 2
    Last Post: November 10th 2009, 11:37 AM

Search Tags


/mathhelpforum @mathhelpforum