Suppose you buy lunch for $16.60 that includes a 8% sales tax. How much did the restaurant charge you for the lunch (excluding any tax) and how much does the restaurant owe for sales tax?

Answer: You were charged $15.37 pre tax

Restaurant will pay $1.23 in sales taxes

Explanation:

We are going to have to use our trusted friend Algebra to solve this one.

In calculating the amount paid for the lunch without any taxes we will say that "x" is the amount that you paid without taxes. Putting it in an equation would be,

16.60 = x * 1.08

16.60 = 1.08x

x = 16.60 / 1.08

= 15.37

You were charged $15.37 without taxes.

To calculate how much the restaurant is to pay in taxes you can just subtract the post tax and pre tax figures which would be,

= 16.6 - 15.37

= $1.23

Restaurant will pay $1.23 in taxes.

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