Question

Including 8% sales tax, a hotel charges $119.88 per night. Find the hotel's nightly cost before tax is added.

a) $110.78
b) $111.00
c) $110.22
d) $111.10

Answer 1

The hotel's nightly cost before tax is found by dividing the total cost of $119.88 by 1.08, which yields a pre-tax cost of $111.00 exactly, making option b) the correct answer.

Step-by-step explanation:

To find the hotel's nightly cost before tax is added, we need to reverse the effect of the 8% sales tax on the total charged amount of $119.88. To do this, we divide the total cost by 1 plus the tax rate expressed as a decimal. The tax rate of 8% as a decimal is 0.08, so we'll divide $119.88 by 1.08.

Here is the calculation:

• Pre-tax cost = $119.88 / 1.08
• Pre-tax cost = $111.00 (rounded to the nearest cent)

Therefore, the correct answer is b) $111.00, which is the hotel's nightly cost before an 8% sales tax is added.