Question

Last year , an article was sold with a sales tax of 10 % on the marked price . This year , the rate of sales tax becomes 12 % . What is the percentage increase in the amount that a customer has to pay this year to buy it if the marked price remains the same?

Answer 1

Solution :-

Let the marked price of the article be Rs. 100

Then, the cost price of the article including sales tax @ 10 %

= 100 + (100*10)/100

= 100 + 10

= Rs. 110

Cost price including 10 % sales tax is Rs. 110.

Now, the marked price remains the same and rate of sales tax is 12 %.

Then, the cost price of the article including sales tax = 100 + (100*12)/100

= 100 + 12

= Rs. 112

So, cost price of the article including 12 % sales tax is Rs. 112.

Percentage increase in the amount paid by the customer 

= [(112 - 110)*100]/110

= (2*100)/110

= 200/110

= 1.818 %

So, the amount paid by the customer is increased by 1.818 % this year to buy the article if the marked price remains the same.