Question

21. The price of watch including 10% VAT is 825. What is its basic price?
(a) * 742.50
(b) ₹775
(c) 750
(d) 907.50​

Answer 1

⇒ Given:

The price of watch including 10% VAT is Rs. 825.

⇒ To Find:

The basic price of the watch excluding the tax.

⇒ Solution:

VAT = 10%

C.P = Rs. 825

Here we are asked to find the basic cost price excluding the tax. How will we find it? The formula to be used is:

$\sf{C.P-VAT\:amount=Basic\:CP}$

Now, how will we find the VAT amount? Its formula is as follows:

$\sf{\dfrac{VAT}{100}\times\:C.P}$

So, the VAT amount here is:

$\sf{=\dfrac{10}{100}\times825}$

$\sf{=\dfrac{825}{10}}$

$\sf{VAT\:amount=Rs.82.5}$

Now, to find the basic price, we need to subtract the VAT amount from the cost price.

So,

Basic Cost price = 825 - 82.5

Basic cost price = Rs. 742.50

Therefore the required correct option is Option A: Rs. 742.50.

VAT:

VAT is the short form of Value Added Tax which was added to goods and services sold all over the nation. Noe, this tax doesn't exist as it is merged with GST.