The list price of an iPod speaker is 6750 It is on sale for

The list price of an iPod speaker is $67.50. It is on sale for 20% off, and there is a 6% sales tax. The store calculates the sales tax on the $67.50, and then takes 20% off the total. Jonathan wants them to take the discount first and then calculate the tax, reasoning that the tax will then be calculated based on the lower price and he will pay less.

1. Is Jonathan correct? How much will he pay each way?

Solution

Store applies ----sales tax on $67.50 ---- $67.50(1.06) = $71.50

Now , discount of 20% = 0.8*$71.50 = $ 57.24

As per Jonanathan:

Discount first ----0.8*$67.50 = $54

Sales Tax --- $54*(1.06) =$ 57.24

Jonathan is incorrect.Both ways he pays same amount