1. Let's state the problem: How to calculate the final price of an item after applying a discount and then adding sales tax. 2. The formula to find the final price is: $$\text{Final Price} = (\text{Original Price} - \text{Discount}) \times (1 + \text{Sales Tax Rate})$$ 3. Important rules: - The discount is subtracted from the original price first. - The sales tax is applied to the discounted price. - Sales tax rate should be expressed as a decimal (e.g., 7% as 0.07). 4. Example: Suppose the original price is $100, the discount is 20%, and the sales tax rate is 7%. 5. Calculate the discount amount: $$\text{Discount} = 100 \times 0.20 = 20$$ 6. Calculate the price after discount: $$100 - 20 = 80$$ 7. Calculate the final price including sales tax: $$80 \times (1 + 0.07) = 80 \times 1.07 = 85.6$$ 8. So, the final price after discount and sales tax is $85.6. This method ensures you correctly apply discounts before adding sales tax, which is standard practice.