4C | Financial Literacy Study Guide

Unit 4: Percents • Lesson 4.3 • Standard: 6.AT.4

Key Vocabulary

Tax — extra money added to the price by the government. (impuesto)
Tip — extra money you give to thank someone for their service (like a waiter). (propina)
Discount — an amount subtracted from the original price (a sale). (descuento)
Markup — the amount a store adds to the cost to make a profit. (margen)
Sale Price — the new, lower price after a discount is taken off. (precio de venta)
Original Price — the price before any discount or tax. (precio original)

Step-by-Step

Tax or Tip (ADD)

  1. 1 Convert the percent to a decimal.
  2. 2 Multiply the price by the decimal.
  3. 3 ADD the result to the original price.
$40 meal + 15% tip
0.15 × $40 = $6.00 tip
$40 + $6 = $46.00 total

Discount (SUBTRACT)

  1. 1 Convert the percent to a decimal.
  2. 2 Multiply the original price by the decimal.
  3. 3 SUBTRACT the result from the original price.
$60 shirt, 25% off
0.25 × $60 = $15 discount
$60 − $15 = $45 sale price

Formula Box

Tax / Tip Amount = Price × Rate (as decimal)
Total with Tax = Price + Tax Amount
Discount Amount = Original Price × Discount Rate
Sale Price = Original Price − Discount Amount

Watch Out!

Practice Problems

1. A meal costs $25.00. The tax rate is 6%. What is the total cost including tax?

2. You want to leave a 20% tip on a $35.00 dinner. How much is the tip?

3. A $80 pair of shoes is 30% off. What is the sale price?

4. A store buys a jacket for $40 and marks it up 50%. What is the selling price?