Question

Mrs. Torres goes out of town on a business trip. She spends 3 nights in a hotel at a charge of $80 per night. She pays 9% tax on the room and tips the maid service 10% of the room charge. Mrs. Torres also has meals worth $109.30 before tax and she tips 15%. If the total cost of her trip is $420.04, approximately what tax rate does Mrs. Torres pay on her meals?
a.
6%
b.
7%
c.
8%

d.
9%

Answer 1

Let t be the tax rate on meals (as a decimal).

Room: 3 × $80 = $240
Room tax: 0.09×240 = $21.60
Maid tip: 0.10×240 = $24.00

Meals before tax: $109.30
Meal tip: 0.15×109.30 = $16.395

Total without meal tax = 240 + 21.60 + 24 + 109.30 + 16.395 = $411.295

Given total 420.04, the meal tax must be 420.04 − 411.295 = $8.745.
So t = 8.745 / 109.30 = 0.08 = 8%.

Answer: c. 8%