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Question

The marked price of an article is Rs. 900 and the rate of sales-tax on it is 6%. If on selling the article at its marked price, a retailer has to pay VAT= Rs. 4.80. find the money paid by him (including sales-tax) for purching this article.

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Solution

The correct option is **C** Rs.869.20

Let the profit of the retailer be Rs.x

Let the profit of the retailer be Rs.x

VAT paid by the shopkeeper is Rs.4.80 at the rate of sales tax 6%

∴ 6% of x=4.80

⇒6100x=4.80

⇒x=4.80×1006 =Rs.80

∴ cost price to the retailer =900−80

=Rs.820

Sales tax paid by the retailer =6% of 820

⇒6100×820=Rs.49.20

∴Price of the article including sales tax paid by the retailer=820+49.20=Rs.869.20

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