Answer:
$ 87.50
Explanation:
First, identify what is given from the problem:
Tax Amount = $5.25
Tax Rate = 6%
Original Cost = ?
Then let us state the original formula stated from the problem.
Tax Amount = (Original Cost)(Percent)
Since the Percent in our equation is the Tax Rate, let us substitute it to avoid confusion.
Tax Amount = (Original Cost)(Tax Rate)
The Original cost is the only unknown in this equation as stated from the given. Now we need to arrange first the equation so that the unknown should be on the left side.
(Original Cost)(Tax Rate) = Tax Amount
To remove the Tax Rate to be multiplied to the Original Cost, let us divide both side by the same Tax Rate. This holds true to all as long as what you did on the left side of the equation should be done on the right side of the equation.
(Original Cost)(Tax Rate) / (Tax Rate) = (Tax Amount) / (Tax Rate)
This will cancel the Tax Rate on the left side of the equation to yield to a new formula for the Original Cost.
Original Cost = (Tax Amount) / (Tax Rate)
We can then substitute the values to solve the problem
Original Cost = $ 5.25 / 0.06
Original Cost = $ 87.50
Therefore the original price before tax is $ 87.50