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| Math Central | Quandaries & Queries |
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Question from Lok, a student: Dear Sir/Madam, I do not understand why 1.05 = 5%, how can I get this? Looking forward to your reply soon! Thanks & regards, |
Hi Lok,
5% is not 1.05, 5% is 0.05. I think I know where the confusion arises.
Suppose you buy an item for $47.76 and there is a 5% sales tax. You then have to pay $47.76 plus 5% of $47.76. This is
$47.76 + 0.05 × $47.76 = (1 + 0.5 ) × $47.76 = 1.05 × $47.76
Thus multiplying the selling price by 1.05 gives the cost, including the 5% sales tax.
Does this help?
Penny
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