4.3: Taxes & Tips
This activity is intended to supplement Algebra I, Chapter 3, Lesson 7.
What does the word “per cent” mean?
Think of “per” as division, like miles per hour. “cent”
Problem 1 – Percent %
Write the decimal equivalent of the following percentages by dividing each value by
 You receive better than average service at a local restaurant and decide to tip
17% . ____  North Carolina raised their sales tax to
4.5% in 2008. ______  For good service the tip for eating at a local restaurant should be
15% before tax. 
5.75% . _________ 
10% . ______
 Observe the pattern in the above percentage to decimal conversion. Explain the pattern. What happens to the ‘decimal’?
Problem 2  Using an Equation
The amount paid for taxes or tips is a percentage of the price.
The above sentence can be translated into a mathematical formula for ease of use.
 “is” means equals and “of” means multiply
When using a formula, it is helpful to know what a variable represents.
Let
Item number  Price 

1. socks 

2. hat 

3. pants 

4. TINspire 

5. shoes 

6. dress 

7. mp3 player 

8. laptop 

Pick three items listed above and write their names and prices below. Then, choose a tax percentage and write it on each line of the “tax rate” column. Then, use the calculator to compute the taxes paid for each item by multiplying the price by the tax rate.
 Item ___________ price = ____________ tax rate = _________ tax paid = ________
 Item ___________ price = ____________ tax rate = _________ tax paid = ________
 Item ___________ price = ____________ tax rate = _________ tax paid = ________
 What is the sum of the taxes paid on the three items?
 What is the tax paid after summing the prices of the three items?
 How do these two amounts compare?
Problem 3 – Mental Math and Estimation
Often you will only need a quick approximate answer for sales tax or the tip to leave at a restaurant.
Example:
The bill came to
Step 1: Round
Step 2: Find
Step 3: Add the two percentage amounts.
 What actually is
15% of$28.85 ? Was the estimate above a good one? Explain.  Estimate the
15% tip if the bill before taxes was$17.97 .  Approximately, what is a
20% tip on$51.12 ? What was your thought process?  Describe two ways to use mental math to determine the tax on a
$1,000 laptop if the sales tax is4% .
Extension
You are eating at a restaurant in a state that has
 You leave a tip of how much? (Hint:
7.25% times2 is close to15% )  How much was the original bill before tax and tip? Show your calculations.
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