A sales tax of 7% - Math Central

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Question from Kenneth:

Hello:

If a sales tax of 7% is placed on every $\$1.00$ of merchandise for sale, is it correct to indicate
the tax as 7%/ per $\$1.00$ or $7\%/\$1.00?$ If the calculation is expressed as $7\%/\$1.00 \times \$5.00,$
the tax is not $\$0.35$ but 0.35. Is a tax rate of 7% incorrectly represented as $7\%/\$1.00$
since the dollar unit cancels from the multiplication?

I thank you for your reply.

Hi Kenneth,

7% is a unitless number, it is just another way of writing $\frac{7}{100}$ or $0.07.$ If a tax is 7% then the tax on $\$5.00$ is $0.07 \times \$5.00 = \$0.35$ as you observed in your question. The expression $\frac{7%}{\$1.00} = \frac{0.07}{\$1.00} = 0.07$ with units of one over dollars. This is not what you want.

You might say the tax is 7 cents per dollar which is $\frac{\$0.07}{\$1.00} = 0.07$ or 7%.

I hope this helps,
Penny

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