Question

marked price of an article is rupees 2860 and rate of vat is 8%.shopkeeper allows a discount of 20% and still make a profit of 10%.if he spent 4% as overheads, then find the original cost price of the article and final selling price including vat

Answer 1

MRP = 2860 vat = 8%
expected SP = 1.08 * MRP = 3088.80
But there is a discount on MRP = 20%

So price before VAT is applied = 2860 - 20% = 2,860 - 572 = 2, 288.

Final Selling price including VAT = 2,288 * 1.08 = 2,471.04
==

Let Cost price = CP overheads = 4%.
cost including overheads = 1.04 CP

so profit = 2,288 - CP * 1.04
profit % = (2,288 - 1.04 CP)/[1.04 * CP] = 10/100

=> 2,288 - 1.04 CP = 0.104 CP
=> CP = 2,288/1.144 = 2,000