How to find the price before tax?
Understand the Problem
The question is asking how to calculate the price of an item before tax is added. This typically involves taking the total price and dividing it by one plus the tax rate expressed as a decimal. For example, if the total price is $110 and the tax rate is 10%, you would divide $110 by 1.10 to find the price before tax.
Answer
Pre-tax price = Total Price / (1 + tax rate)
The pre-tax price is obtained by dividing the total price by (1 + tax rate).
Answer for screen readers
The pre-tax price is obtained by dividing the total price by (1 + tax rate).
More Information
This method helps you determine how much an item originally cost before tax was added, important for budgeting or accounting.
Tips
A common mistake is forgetting to convert the percentage tax rate to a decimal before the calculation.
Sources
- How the Sales Tax Decalculator Works - corporatefinanceinstitute.com
- Reverse Sales Tax Calculations - calculatorsoup.com
- How to find the original price before tax - Quora - quora.com
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