Question

The price of an article is Rs. 8,250 which includes tax at 10%. Find how much more or less does a customer pay for the article, if the tax on the article: (i) increases to 15% (ii) decreases to 6% (iii) increases by 2% (iv) decreases by 3%.

Answer 1

Price of an article = Rs. 8,250
Rate of Sales Tax = 10%
Let the list price = x
$\therefore$ Sales tax = $x\times \frac{10}{100}=\frac{x}{10}$
Sales price = $x+\frac{x}{10}=\frac{11x}{10}$
$\therefore \frac{11x}{10}$= 8250
$x=\frac{8250\times 10}{11}$ = 7,500
$\therefore$ List price = Rs.7,500
(i) Rate of sales tax = 15%
$\therefore$ Sale price = Rs. 7,500 $\frac{(100+15)}{100}$
= Rs. 7,500 $\times \frac{115}{100}Rs.8,625$
$\therefore$ Customer will pay more.
Hence increase = 8,625 - 8,250 = Rs. 375
(ii) Rate of Sales Tax = 6%
$\therefore$ Sale price = Rs. 7,500 $\frac{(100+6)}{100}$
= Rs. 7,500 $\times \frac{106}{100}$ = Rs. 7,950
$\therefore$ The customer will pay less the amount of
= Rs. 8,250 - Rs. 7,950 = Rs. 300
(iii) Rate of sales tax = (10+2)% = 12%
$\therefore$ Sale price = Rs. 7,500 $\times \frac{(100+12)}{100}$
= Rs. 7,500 $\times \frac{112}{100}=Rs.8,400$
$\therefore$ The Customer will have to pay more the amount of Rs. 8,400 - Rs. 8,250
= Rs. 150
(iv) Rate of Sales Tax = 10-3 = 7%
$\therefore$ Sale price = Rs. 7,500 $\times \frac{(100+7)}{100}$
= Rs. $7,500\times \frac{107}{100}=Rs.8,025$
$\therefore$ The customer will have to pay less
= Rs. 8,250 - Rs. 8,025 = Rs. 225