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How is interest similar to sales tax and markups? How is it different?

2 Answers

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Final answer:

Interest, sales tax, and markups are all additional charges added to the original amount, but they differ in how they are calculated and when they are charged.

Step-by-step explanation:

Interest is similar to sales tax and markups in that they all involve additional charges or fees that are added to the original amount.

Interest is the extra amount paid for borrowing money, while sales tax is the extra amount paid on the purchase of goods or services, and markups are the extra amount added to the cost price to determine the selling price. They all increase the total cost or price of the transaction.

The main difference is that interest and markups are calculated as a percentage of the original amount, while sales tax is calculated as a percentage of the purchase price. Additionally, interest and markups are typically charged over a period of time or for a specific duration, while sales tax is a one-time charge at the point of sale.

User Ttmt
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They are similar because they are all based on percents. They are different because interest can be added over time or multiple times. Discount is a percent that is removed and mark up is a percent that is added on. 
User SubRed
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