A shopkeeper bought a washing machine at a discount of 20% from a wholesaler, the printed price of the washing machine being Rs 18,000. The shopkeeper sells it to a consumer at a discount of 10% on the printed price. If the rate of sales tax is 8% find:
(i) The VAT paid by the shopkeeper.
(ii) The total amount that the consumer pays for the washing machine.
[4 MARKS]

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Solution

Each subpart: 2 Marks

The printed price of a washing machine = Rs 18,000
Discount given by wholesaler = 20%
Total discount = $R s \frac{18, 000 \times 20}{100}$
= Rs 3600
So, selling price = Rs 18,000 - Rs 3,600
= Rs 14,400
$V A T = \frac{14, 400 \times 8}{100}$
= Rs 1152
VAT paid by the shopkeeper = Rs 1152.
(ii) The printed price of a washing machine = Rs 18,000
Discount given by shokeeper = $10 %$
Total discount $= R s \frac{18, 000 \times 10}{100}$
= Rs 1,800
So, selling price Rs 18,000 - Rs 1,800
= Rs 16,200
$V A T = \frac{16, 200 \times 8}{100}$
= Rs 1,296
The Total amount that the consumer pays for the washing machine = Rs 16,200 + Rs 1,296 = Rs 17,496

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