Percent Applications

Lesson 2 of 4: Real-World Money

Learning Objectives:

• Calculate sales tax and total costs
• Estimate tips using mental math strategies
• Understand markups and retail pricing
• Calculate discounts and sale prices
• Solve multi-step problems (like tax + tip)

Part 1: Sales Tax

Sales Tax is a percent of a purchase price collected by the government.

Formula:

Or use a Multiplier:

Example: Calculating Tax

Problem: You buy headphones for $45. The sales tax is 8%. What is the total cost?

Method 1: Two Steps

1. Find Tax:

2. Add to Price:

Method 2: One Step

Practice: Sales Tax

Find the Total Cost.

1. Shirt: $20 with 5% tax
2. Laptop: $800 with 9% tax
3. Groceries: $150 with 6% tax

Pause and calculate.

Answers

1. Shirt:

2. Laptop:

3. Groceries:

Did you remember to convert percents to decimals? (5% = 0.05, not 0.5)

Part 2: Tips (Gratuities)

A Tip is extra money given for good service.

It is usually calculated based on the bill amount before tax is added.

Understanding Tip Structure

Common Rates:

• 15% (Standard)
• 18% (Good)
• 20% (Excellent)

Mental Math Strategy: 15% Tip

Don't use a calculator! Break it down:

1. Find 10% (Move decimal left)
2. Find 5% (Half of the 10%)
3. Add them together.

Example: Mental Math Tip

Bill: $48.00. Tip: 15%.

1. Find 10%: Move decimal left → $4.80
2. Find 5%: Half of $4.80 → $2.40
3. Add:

Total Tip = $7.20

Practice: Mental Math

Calculate a 15% tip mentally.

1. Bill: $60
2. Bill: $20
3. Bill: $80

Pause and try without writing anything down.

Answers

1. $60: $9
2. $20: $3
3. $80: $12

Bonus: For a 20% tip, just double the 10% amount!
()

Part 3: Retail Chain (Markups & Discounts)

Prices change as goods move from factory to store to customer.

• Markup: Price goes UP (Store profit)
• Discount: Price goes DOWN (Sale)

Markup Example

Problem: A store buys a game for $30 and marks it up 40%. What is the selling price?

Method: Multiply by

The selling price is $42.

Discount (Markdown) Example

Problem: A $42 game is on sale for 25% off. What is the sale price?

Method: Multiply by

• You pay 75% of the price (100% - 25%).

The sale price is $31.50.

Part 4: Commission

Commission is money earned by a salesperson based on how much they sell.

Commission Example

Problem: A real estate agent sells a house for $250,000. Her commission rate is 3%. How much does she earn?

Calculation:

She earns $7,500.

Part 5: Multi-Step Problems

Real life often combines these concepts.

The "Double Tax" Mistake:
When applying multiple percents (like Discount then Tax), do them in order.

1. Calculate Sale Price first.
2. Calculate Tax on the Sale Price (not the original).

Multi-Step Example

Problem: A $500 TV is 20% off. Sales tax is 8%. What is the final total?

1. Find Sale Price:

2. Find Total with Tax:

Answer: $432

(Note: gives the same result!)

Summary: Key Takeaways

• Sales Tax: Adds to cost. Multiply by .
• Tips: Calculated on bill before tax.
• Markups: Increase price. Multiply by .
• Discounts: Decrease price. Multiply by .
• Commissions: Percent of total sales.
• Multi-step: Apply discounts first, then tax the result.

Watch Out For...

Successive Discounts are NOT additive!
"20% off plus another 20% off" ≠ "40% off".

Proof:

Always calculate them one by one.

Next Steps

Practice:

• Complete the "Shopping Challenge" worksheet.
• Next time you are at a store or restaurant, try to calculate the tax or tip!

Coming Up:

• Lesson 3: Simple Interest
• Lesson 4: Percent Error & Complex Problems