Question

Andrew bought a new car for $32,000. The dealer gave him $10,000 for his trade-in. Sales tax is 5% but is only charged on the difference between the cost of the new car and the value of the trade-in. What does Andrew pay in sales tax?

Answer 1

Answer:Andrew will pay $1100 in sales tax

Explanation:

Andrew bought a new car for $32,000. The dealer gave him $10,000 for his trade-in. Sales tax is 5% but is only charged on the difference between the cost of the new car and the value of the trade-in. The value of the difference between the cost of the new car and the value of the trade-in would be

32000 - 10000 = $22000

Therefore, the amount that Andrew will pay in sales tax would be

5/100 × 22000 = 0.05 × 22000 = $1100