Difference between discount and sales tax calculation

📚 Understanding Discounts and Sales Tax

Discounts and sales tax are both ways of changing the price of an item, but they work in opposite directions. A discount 📉 reduces the original price, making the item cheaper. Sales tax, on the other hand, 📈 increases the price, adding a percentage of the original price to the cost.

🔎 Definitions

• 🏷️ Discount: A reduction in the original price of a product or service. It is usually expressed as a percentage or a fixed amount.
• 🏦 Sales Tax: A tax imposed by the government on the sale of goods and services. It is usually expressed as a percentage of the selling price.

📊 Discount vs. Sales Tax: A Detailed Comparison

💡Key Takeaways

• 💰 Discounts save you money: 🧑‍🏫 They are applied to lower the initial price of an item. For example, if a shirt costs $25 and there is a 10% discount, you pay $25 - ($25 * 0.10) = $22.50.
• 🧾 Sales tax adds to the cost: 🌍 This is a percentage added by the government and varies by location. If an item costs $20 and the sales tax is 6%, you pay $20 + ($20 * 0.06) = $21.20.
• ➕ Order matters: ➗ If both discount and tax are applied, the discount is usually calculated first.
• ➗ Example: Let's say an item costs $100. There's a 10% discount and a 5% sales tax.
  First, calculate the discount: $100 * 0.10 = $10. Subtract it: $100 - $10 = $90.
  Next, calculate the sales tax on the discounted price: $90 * 0.05 = $4.50. Add it: $90 + $4.50 = $94.50.