DebtSmart.com Sunday, January 24, 2021

Household Math: Before the tip

by Scott Bilker
Scott Bilker Scott Bilker is the founder of DebtSmart.com and author of the best-selling books, Talk Your Way Out of Credit Card DebtCredit Card and Debt Management, and How to be more Credit Card and Debt Smart. Receive the 5-Year Loan Spreadsheet when you subscribe to his email newsletter.

Rachel was telling Jack about her romantic date with Dave. Jack is a man that is more concerned with the cost of the frolic than the details of their amorous evening. Jack asked Rachel how much the tab was for food only (tax included). Rachel was too focused on Dave to remember the amount for the actual dinners, but she did remember tipping the waiter 16% and that the final bill, tip included, was $159.50. Jack was quite amazed that Rachel would remember so much, but not recall the cost of the dinner before the tip. Of course, Jack knows his math and can easily figure it out. Can you? What is the cost of the dinner before the tip? ($137.50, $140.25, or $142.25)

 

ANSWER
$137.50

 

EXPLANATION
This problem is straightforward!

Cost of Dinner + 0.16 x Cost of Dinner = Total

Combining terms…

1.16 x Cost of Dinner = Total

Cost of Dinner = Total / 1.16

$159.50 / 1.16 = $137.50