Question

You are buying a new car. The price (MSRP) is $16,995. You are trading in your old car which is valued by the dealer at

$5,500. Sales tax is 7%, but is paid only on the difference between the price and trade-in value. What is the sales tax?

Answer 1

Answer: $804.65

Explanation:

Answer 2

$804.65

Explanation:

Manufacturer's Suggested Retail Price (MSRP)=$16,995

Trade-In Value=$5,500.

Difference

16,995-5500

=$11,495

Since sales tax is 7%, but is paid only on the difference between the price and trade-in value.

Sales Tax =7% of $11,495

=0.07 X 11,495

Sales Tax=$804.65