Certified Pennsylvania Evaluator Practice Exam

How do you calculate a 2% discount on taxes?

1. Taxes x 0.98

2. Taxes x 1.02

3. Taxes - 2%

4. Taxes x 98%

The correct answer is: Taxes x 98%

To calculate a 2% discount on taxes, you need to effectively reduce the total tax amount by 2%. When you take the total amount of taxes and multiply it by 98%, you are effectively applying that 2% reduction to the total. This means you are retaining 98% of the original amount, which corresponds to a 2% discount. This method can be particularly useful as it allows for a straightforward calculation if you're used to working with percentage multipliers. By using the factor of 0.98 (or 98%), you are directly reflecting the result of taking 2% off the total amount, rather than needing to calculate the discount as a separate number and then subtracting it. In contrast, adding percentages or using any method that involves increasing the tax amount would not be appropriate for calculating a discount. Therefore, multiplying the tax by 98% accurately applies the desired discount.