If a tax increase of one quarter percent causes you to pay an extra 15¢ for a product, what was the original price of the item?

It might seem tricky to work backward from such a small percentage, but a little scaling makes the logic clear. A tax increase of one quarter of a percent, or 0.25%, added 15 cents to the final cost. To simplify the math, we can first figure out what a full one percent would be. Since one percent is four times larger than a quarter of a percent, we can multiply the 15 cents by four, which gives us 60 cents. So, for this item, one percent of its price is equal to 60 cents.

Once you know that 1% of the price is 60¢, finding 100%—the entire original price—is straightforward. You simply multiply that 60-cent value by 100. Doing so gives you a total of 6,000 cents, which is equivalent to $60.00. This kind of calculation is a practical example of how small tax adjustments, often measured in fractions of a percent, can have a noticeable impact on the prices we pay every day. These small increments are easier for governments to pass but still generate significant revenue when applied across millions of transactions.