Calculate Sales Tax on $1.25 Purchase - Effective Rate

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To calculate the effective sales tax rate on a $1.25 purchase that totals $1.40, the difference of $0.15 represents the sales tax. The formula to determine the tax rate (r) is derived from the equation 1.25 * r = 0.15. Solving for r gives an effective tax rate of 12%. Understanding this calculation can help clarify how sales tax is computed on purchases. This discussion emphasizes the importance of using formulas for accurate tax calculations.
chocolatelover
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Hi everyone,

Homework Statement


A child is surprised that she must pay $1.40 for a toy marked $1.25 because of sales tax. What is the effective tax rate on this purchase?

Homework Equations





The Attempt at a Solution



I know that the difference between the two is .15. I could just guess and check, but is there a formula?

Thank you very much
 
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Try thinking about how tax is computed.

1.25 * r = 0.15
 
Thank you very much

Regards
 

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