Question

A Shopkeeper allows a discount of 20% on the marked price
but charges 5% sales tax on the marked price and 5% service tax
on the discounted price.
If the customer pays Rs. 2670 as price including tax,
then what is marked price of the item?

Answer 1

given, 
discount=20%
rate of sale tax=5%
service tax=5%
sell price=₹2670 including tax
marked price=₹x

Answer 2

Let x be the marked price.

Find the discounted price in term of x:

205 discount = 20% of x = 0.2x

Price after discount = x - 0.2x = 0.8x

Find the sales tax (on marked price):

Sales Tax = 5% of x = 0.05x

Find the service tax (on discounted price):

Service Tax = 5% of 0.8x = 0.05(0.8x) = 0.04x

Solve x:

Customer paid Rs2670

0.8x + 0.05x + 0.04x = 2670

0.89x = 2670

x = 2670 ÷ 0.89

x = Rs 3000

Answer: The marked price is Rs 3000