Question

When you buy a new car, you have to pay sales tax, and in Texas, that is 6.25%. Some people roll that sales tax into the loan they will get for their car and pay it off as part of their car payments. Others pay cash for the sales tax at the time of purchase in hopes that the loan payments will be less. You plan to pay cash for the sales tax on your new car.

The car you have chosen costs $23,550, so you need to have $[type your answer] in cash with you when you purchase the car.

Answer 1

To calculate the sales tax for a $23,550 car at a 6.25% rate, convert the tax rate to decimal and multiply by the cost of the car, rounding to the nearest cent. You will need $1,471.88 in cash for the sales tax.

Step-by-step explanation:

To calculate the amount of sales tax you need to have in cash when you purchase your new car for $23,550 in Texas with a sales tax rate of 6.25%, you will use the following formula:

Amount of sales tax = price × rate of sales tax

First, convert the percent to a decimal:

6.25% = 0.0625

Then, multiply this by the total cost of the car:

$23,550 × 0.0625 = $1,471.875

You will need to round this amount to the nearest cent. Thus, the sales tax you need to pay in cash is:

$1,471.88