Sales tax

Saumyojit said:
YEs thats because in the question it says A storekeeper sold a wrist watch for $660, including a sales tax of 10%.
its says including .

Rather if it was said that A storekeeper sold a wrist watch for $660, giving a sales tax of 10%. on orignal sp OR by increasing 10 percent of orignal sp, then i would be obvious

that i need to add x + 10x/100 =660
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I am assuming that by x you mean the price of the item, which you say is 660.

Now according to what you said, x + 10x/100 =660, 660 + 10*660/100 = 660. I then would conclude that 10*660/100 = 0 which is simply not true.
 
Jomo said:
I am assuming that by x you mean the price of the item, which you say is 660.

Now according to what you said, x + 10x/100 =660, 660 + 10*660/100 = 660. I then would conclude that 10*660/100 = 0 which is simply not true.
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no x is 600
 
Ok, so the final price, after tax is 660. How would you find the original price
 
10 percent is included in rs 660 then to exclude sales tax we need exclude 10 percent of 660 =66rs

Then sp is 594

here i am doing subtraction and Then sp is 594
 
No! Did you check this? If the original price was 594 then the tax, 10% would be 0.10(594)= 59.4. Adding that to 594 would make the price 653.4, not 660.

Taking 10% of 660 is taking 10% of an amount that already includes the tax. You don't include the tax a second time!

A percentage is always a percent of something. What is this 10% of? It is, of course, 10% of the original price. If the original price was S then the tax is 0.10S so that the selling price, including tax, is S+ 0.10S= 1.10S= 660.
 
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WholeSale Price = Cost
Cost + Markup = Shelf Price = Retail Price
Retail Price + Tax = Final Price

When you purchase an item, how is the tax calculated? You do not know the final price at that point. You cannot calculate the tax from the final price. Let's try it anyway, with a 10% tax: 10% * (A Number We Don't Know Yet) = ??? What do you get?
 
HallsofIvy said:
No! Did you check this? If the original price was 594 then the tax, 10% would be 0.10(594)= 59.4. Adding that to 594 would make the price 653.4, not 660.

Taking 10% of 660 is taking 10% of an amount that already includes the tax. You don't include the tax a second time!

A percentage is always a percent of something. What is this 10% of? It is, of course, 10% of the original price. If the original price was S then the tax is 0.10S so that the selling price, including tax, is S+ 0.10S= 1.10S= 660.
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I am not including tax ....i am excluding tax of rs 66 from rs 660 . read it carefully.
In the question it is said clearly 10percent is included in rs 660 then sales tax we need to exclude not include !!

10 percent of 660 =66rs i am finding out how much sales tax is in there in 660 . therefore taking 10 percent of 660 to find out how much in rs sales tax is there my intention is never to take 10% of an amount that already includes the tax.
 
@Jomo reply
I am not including tax ....i am excluding tax of rs 66 from rs 660 . read it carefully.
In the question it is said clearly 10percent is included in rs 660 then sales tax we need to exclude not include !!

10 percent of 660 =66rs i am finding out how much sales tax is in there in 660 . therefore taking 10 percent of 660 to find out how much in rs sales tax is there my intention is never to take 10% of an amount that already includes the tax.
 
Saumyojit said:
@Jomo reply
I am not including tax ....i am excluding tax of rs 66 from rs 660 . read it carefully.
In the question it is said clearly 10percent is included in rs 660 then sales tax we need to exclude not include !!

10 percent of 660 =66rs i am finding out how much sales tax is in there in 660 . therefore taking 10 percent of 660 to find out how much in rs sales tax is there my intention is never to take 10% of an amount that already includes the tax.
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You say it is "not my intention to take 10% of an amount that already includes the tax" but when you take 10% of 660 you are doing exactly that! In your original post you said that the 660 "already included the tax".

Did the 660 sale price include the tax or not?
 
HallsofIvy said:
You say it is "not my intention to take 10% of an amount that already includes the tax" but when you take 10% of 660 you are doing exactly that! In your original post you said that the 660 "already included the tax".

Did the 660 sale price include the tax or not?
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what is my mistake??
In the question it is said clearly 10percent is included in rs 660 then sales tax we need to exclude not include !!
sales tax is included in 660 right and i know it is 10 percent so i exclude the 10 percent from 660 to get remaining sp .

my approach is from reading the question and the first common sense thought that came to my mind!
 
Shelf Price + Tax = 600 + 10% of 600 = 600 + 60 = 660 = Final Price <== Where you started.

Final Price - Tax = 660 - 10% of 600 = 660 - 60 = 600 = Shelf Price <== Getting back to where you started.

660 - 10% of 660 = 660 - 66 = 594 <== This did not get you back where you started. It must, therefore, be incorrect.

The tax calculation does not care about the Final Price. The tax MUST be calculated using the Shelf Price.

This is the problem with "common sense". It often is not sensible at all. You have fallen into this trap. Just because you thought of it does not make it correct or sensible. Everyone thinks incorrect things from time to time. The important thing is to learn. Time to pull yourself out. Stop trying to calculate the tax using the Final Price. That is simply incorrect. It doesn't work that way anywhere. Calculate the tax, no matter when, before the sale or after the sale, using the Shelf Price. Do not use the Final Price to calculate the tax.
 
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