A buyer values a house at $525,000 and a seller values the same house at $485,000.If sales tax is 8% and is levied on the buyer,then,what would be the highest price that the buyer would be willing to pay?

Question

​A buyer values a house at $525,000 and a seller values the same house at $485,000.If sales tax is 8% and is levied on the buyer,then,what would be the highest price that the buyer would be willing to pay?

Quizplus · Accepted Answer

The highest price the buyer would be willing to pay is the seller's asking price plus the sales tax on that price. The sales tax on $485,000 is $485,000 x 0.08 = $38,800. Therefore, the highest price the buyer would be willing to pay is $485,000 + $38,800 = $523,800.

​A Buyer Values a House at $525,000 and a Seller

A Buyer Values a House at $525,000 and a Seller