Answer:
7% is the sales tax.
Explanation:
So, our base price is x dollars:
x = base price
Now, we are given the expression 1.07x + 17
This expression can be rewritten as:
(1.00 + 0.07)x + 17
Also seen as:
(100% + 7%)x + 17
We know that 100% is the normal price, but the added 0.07 or 7% should be the sales tax of the base price.
We know this because it is a "rate" multiplying by the base price x.
Furthermore, since the percentage is above 1.00 or 100% (the rate is 107%), then the price of the keg will increase. This must be true because it is a sales tax.
The constant number 17 represents the starting price if there was no tax (or if the base price was x = 0).