ACT Math · Ratios, rates, and percents
A restaurant bill is $60 before tax. An 8% sales tax is applied, and then a 20% tip is added based on the pre-tax amount. What is the…
A restaurant bill is $60 before tax. An 8% sales tax is applied, and then a 20% tip is added based on the pre-tax amount. What is the total amount paid?
Answer and explanation
Answer: G: $76.80
Compute the tax and the tip on the pre-tax amount of $60. The tax is and the tip is . The total is dollars, choice G. Choice F ($72) includes the tip but forgets the tax. Choices H ($79.20) and J ($86.40) overcharge: they do not correspond to a tax of plus a tip of of $60, and they come from compounding the percents on a larger amount. The problem says the tip is based on the pre-tax amount, so each percent applies to $60.
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