Question

Yolanda is shopping for a used car in a city where the tax is 9%, and the title and license fee are $290. There is no tax on the title and license fee itself. If the maximum that she can spend is $8138, then she should look at cars in what price range?

a. $7403 - $8138
b. $6715 - $7403
c. $6400 - $6715
d. $6138 - $6400

Answer 1

To determine the price range of cars that Yolanda should look at, we subtract the title and license fee from her maximum spending limit and divide by (1 + tax rate). The correct price range is $7403 - $8138.

Step-by-step explanation:

To determine the price range of cars that Yolanda should look at, we need to consider the maximum amount she can spend. Let's call this amount P. The tax rate is 9% and the title and license fee is $290. This fee is not subject to tax. So, if Yolanda can spend $8138 in total, we need to subtract the title and license fee from it to find out the maximum price of the car before tax. This can be calculated using the formula:

P - $290 = Maximum price of the car

Then, we divide the maximum price of the car before tax by (1 + tax rate) to find the price range of cars that Yolanda should consider. Let's call the maximum price of the car before tax C. This can be calculated using the formula:

C / (1 + tax rate) = Minimum price of the car

Therefore, the price range of cars that Yolanda should look at is $7403 - $8138. This corresponds to option a.