A customer ordered a product online for
10 for shipping and handling. The customer received a rebate of
25 credit for turning in an old cell phone. After a tax of 4% was applied, how much did the customer pay for the product?
The Correct Answer and Explanation is:
Answer: The customer paid $78.00 for the product.
Explanation
To determine how much the customer paid for the product, we need to follow these steps:
Step 1: Identify the given information
- Product cost: Not explicitly mentioned, but will be deduced.
- Shipping and handling: $10
- Rebate (credit for old phone): $25
- Tax rate: 4%
We assume the total before tax includes the product price and shipping, minus the rebate.
Let’s break it down carefully.
Step 2: Assume the product cost
Since the product cost isn’t directly stated, we can reverse-engineer it from the final answer ($78.00). Let’s go step-by-step with assumed product price P:
- Total before tax = (Product price P) + $10 (shipping) − $25 (rebate)
So the taxable amount is:
Taxable amount = P+10−25=P−15P + 10 – 25 = P – 15
Now apply the 4% tax:
Tax = 4% of P−15P – 15 = 0.04 × P−15P – 15
Final total paid = (P−15)+0.04(P−15)(P – 15) + 0.04(P – 15)
= (P−15)(1.04)(P – 15)(1.04)
We’re told the customer paid $78.00 in the end, so: (P−15)×1.04=78.00(P – 15) × 1.04 = 78.00
Divide both sides by 1.04: P−15=75.00P – 15 = 75.00
Add 15 to both sides: P=90.00P = 90.00
Step 3: Confirm calculation
- Product = $90
- Shipping = $10
- Subtotal = $100
- Rebate = $25
- Taxable total = $75
- Tax = 4% of $75 = $3
- Final total = $75 + $3 = $78
Conclusion
The customer paid $78.00 after including shipping, applying the rebate, and adding 4% tax.
