Final answer:
A percentage of the price that is subtracted from the total cost and not paid by the customer is known as a discount. Taxes, however, such as sales tax, are additional costs applied to the purchase price of goods or services.
Step-by-step explanation:
The term describing a percentage of the price that is subtracted and you do not have to pay is a discount. Taxes, on the other hand, are additional costs added to the price of an item. For instance, if you are calculating sales tax, you would use the formula: amount of sales tax = price × rate of sales tax.
Taxes are monies collected by the government and are added to the original amount of the item or service being purchased. Discounts reduce the total price you have to pay for an item.
Using an example: If there is a 10% sales tax on a $150 item, the amount of sales tax would be $150.00 × 0.10, which equals $15.00. So, the total cost with sales tax would be $165.00. Similarly, if a $65 item is taxed at 5%, the sales tax would be $65.00 × 0.05, which is $3.25, making the total cost $68.25. Remember to convert the percentage to a decimal before multiplying by the total cost to find the sales tax.