A $60 item is discounted 25% for a sale. If sales tax is 8%, what is the final price after tax?

A $60 item is discounted 25% for a sale. If sales tax is 8%, what is the final price after tax?

• A. 48.60
• B. 44.40
• C. 50.40
• D. 58.80

Answer: (A)

Percent changes stack multiplicatively: first apply the discount, then add tax. Start with 60 dollars. A 25% discount leaves you with 75% of the price: 60 × 0.75 = 45. Then apply 8% sales tax to that discounted price: 45 × 1.08 = 48.60. So the final price is $48.60. (You can also see this as 60 × 0.75 × 1.08 = 60 × 0.81 = 48.60.)

Percent changes stack multiplicatively: first apply the discount, then add tax. Start with 60 dollars. A 25% discount leaves you with 75% of the price: 60 × 0.75 = 45. Then apply 8% sales tax to that discounted price: 45 × 1.08 = 48.60. So the final price is $48.60. (You can also see this as 60 × 0.75 × 1.08 = 60 × 0.81 = 48.60.)