Question

Calculate the total cost of an item bought at a negotiated price of $15,640 and a $2,500 trade-in allowance. The sales tax is 7.2 percent sales tax with an $86 registration fee.

$13,140

$14,352.08

$1,212.08

$14,266.08

Answer 1

B. $14352.08

Explanation:

Let us find cost of item after 7.2% of sales tax. The cost of item after 7.2% of sales tax will be equal to 15640 plus 7.2% of 15640.

`\text{The cost of item after sales tax}=15640+((7.2)/(100)* 15640)`

`\text{The cost of item after sales tax}=15640+(0.072* 15640)`

`\text{The cost of item after sales tax}=15640+1126.08`

`\text{The cost of item after sales tax}=16766.08`

Therefore the cost of item after 7.2% of sales tax will be $16766.08.

Now let us add registration fee to the cost of item.

`\text{The cost of item after registration fee}=16766.08+86`

`\text{The cost of item after registration fee}=16852.08`

Now let us subtract $2500 trade allowance to find the total cost of the item.

`\text{The total cost of item}=16852.08-2500`

`\text{The total cost of item}=14352.08`

Therefore, the total cost of item will be $14352.08 and option B is the correct choice.