Question

Sales tax in Birmingham, AL, is the highest in the nation at 10 percent. Pete paid $9.44 in sales tax for an item in Birmingham, AL. What was the price of the item before tax was included?

a) $0.09
b) $0.94
c) $94.40
d) $103.84

Answer 1

To determine the price before tax, we convert the 10% tax rate to a decimal (0.10) and divide the amount of paid sales tax ($9.44) by this decimal, resulting in a pre-tax price of $94.40.

Step-by-step explanation:

The question involves calculating the pre-tax price of an item given the amount of sales tax paid and the sales tax rate. In Birmingham, AL, the sales tax rate is 10 percent. Pete paid $9.44 in sales tax for an item. To find the price of the item before tax was included, we need to reverse the process of calculating sales tax.

Let's start by converting the 10 percent sales tax to a decimal, which is 0.10. We know that the sales tax paid ($9.44) is 10% of the pre-tax price, so we can set up an equation where the pre-tax price times 0.10 equals $9.44.

Pre-tax price × 0.10 = $9.44

To solve for the pre-tax price, we divide the amount of sales tax paid by the decimal form of the tax rate:

Pre-tax price = $9.44 ÷ 0.10

This gives us:

Pre-tax price = $94.40

Therefore, the correct answer is c) $94.40, which is the price of the item before the sales tax was added.