Question

A shopkeeper buys an article whose list price is ₹ 400 at some rate discount from a wholesaler. He sells the article to a consumer at the list price and charges sales tax at the rate of 9 % . If the shopkeeper has to pay a VAT of ₹ 3.60, find the rate of discount at which he bought the article from the wholesaler

• A. 5 %
• B. 4.5 %
• C. 40 %
• D. 10 %

Answer 1

The correct option is D

10 %

Let the amount of discount be ₹ $x$
Shopkeeper sells the article at list price ,
Profit made by the shopkeeper = ₹ $x$
$\therefore$ Value added by the shopkeeper = ₹ $x$
VAT paid by the shopkeeper = ₹ 3.60; Rate of Sales Tax = 9%
$\therefore$ 9 % of $x$ = ₹ 3.60
$\frac{9}{100}$$\times$ $x$ = ₹ 3.60
$9x$ = 360
$x$ = ₹ 40
$\therefore$ Amount of Discount = ₹ 40

Given that the printed price of the article = ₹ 400 and discount amount = ₹ 40

Rate of Discount = ($\frac{40}{400}$ $\times$ 100) %
= 10 %

Hence the Rate of Discount = 10 %