Question

Martha paid $42.40 for her sister’s birthday present. This included 6% sales tax. What was the cost of the gift before tax?
A. $40.00
B. $44.94
C. $25.44
D. $2.40

Answer 1

This is a difficult question to explain, but very useful in the "real world". We know that if we want to find percentages of numbers, we can turn the percents into decimals that make them much easier to work with and calculate with. So we know that if there is a 6% tax, we can say that we need to multiply the original price by 1.06 (or 100% of the price + the 6% tax on top) to get the total price we would pay. However, since we started with the total price we need to pay, we just do the opposite; we need to DIVIDE by 1.06 to get the original amount before tax. Therefore, the answer is A: 40.00.

We can also eliminate B because before tax should not be MORE than what you pay in total!. We can eliminate C because it is fairly clear that this answer is more in the 50% range ;) and D is actually just the 6% tax. HTH!