If the sales tax rate were to increase from $7 \%$ to $7.5 \%$, then the tax on a $\$ 1000$ item would go up by
(A) $\$ 75.00$
(B) $\$ 5.00$
(C) $\$ 0.5$
(D) $\$ 0.05$
(E) $\$ 7.50$
If the sales tax rate were to increase from $7 \%$ to $7.5 \%$, then the tax on a $\$ 1000$ item would go up by
(A) $\$ 75.00$
(B) $\$ 5.00$
(C) $\$ 0.5$
(D) $\$ 0.05$
(E) $\$ 7.50$

## Solution

If the sales tax rate increases by $.5 \%$, this would represent an increase of $\$ .50$ on each $\$ 100$.

Thus the increase in tax would be $(10)(\$ .50)=\$ 5.00$.

ANSWER: (B)