To find the tip of the bill. You will need to find how much of $86.40 is 20%. In this question, they're asking how much is the tip, not how much will the final price be.
When you multiply a percentage you move the decimal point 2 times to the left: 20. → .20
You would multiply $86.40 by .20
When you solve it 86.40 × .20 = 17.28
$17.28 is 20% of $86.40
$17.28 will be the amount he got for his tip.
