Question

After allowing 20% discount on the marked price of an ipod and levying 13%vat the price of the ipod becomes 7119 find the value added tax

Answer 1

Answer:

Let m be the market price. Then it is given that

m(1-20/100)×(1+13/100)=7119

m(1-0.2)×1.13=7119

m×0.8×1.13=7119

m=7119/(0.8×1.13)=7875

price before VAT=7875×0.8=6300

13% of this amount is VAT=6360×0.13=819