Answers POP Financial Math 2627 Topic TestQuestion 38

38

QuizMultiple Choice

Topic Test

Question 38 • POP Financial Math 26/27

How can sales tax alter the size of the tip you leave at a restaurant?

Answer

A

A tip of a given percentage (such as a 20% tip) will be larger if calculated after tax than if calculated before tax.

B

The tip becomes part of the bill as a whole, so you have to increase the sales tax by a corresponding amount.

C

You do not have to double-calculate a percentage on any purchases, so you should pay for tax or a tip but not both.

D

A standard tip is 15% to 20% of the sales tax.

Explanation

If you calculate the tip after adding sales tax, the amount you apply the tip percentage to is larger. For example, a 20% tip on a $50 bill before tax is $10, while a 20% tip on a $55 total after tax is $11. So a given percentage tip is larger when calculated after tax.

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