Question

David buys a new car on hire purchase. The car costs R75 000 (excluding VAT) and he trades in his old car (that is fully paid for) for R9 500. The car registration, documentation and licence fees are R2 000.

Determine the cost of the car, inclusive of VAT, trade-in and the other fees. ​

Answer 1

We need to calculate the total cost of the car, inclusive of VAT, trade-in, and the other fees.

First, we need to calculate the VAT on the cost of the car:

VAT = 15% of R75 000 = R11 250

Next, we need to calculate the total value of the trade-in and other fees:

Trade-in + other fees = R9 500 + R2 000 = R11 500

Now, we can calculate the total cost of the car, inclusive of VAT, trade-in, and other fees:

Total cost = Cost of car + VAT + Trade-in + Other fees
Total cost = R75 000 + R11 250 + R11 500
Total cost = R97 750

Therefore, the cost of the car, inclusive of VAT, trade-in, and other fees, is R97 750.

Answer 2

R93,750. (I have changed R to $ in explanation)

Explanation:

To determine the cost of the car inclusive of VAT, trade-in, and other fees, we first need to calculate the VAT amount. Assuming the VAT rate is 15%:

VAT = 0.15 x $75,000 = $11,250

Next, we can calculate the total cost of the car, inclusive of VAT:

Total cost of car = Cost of car + VAT

Total cost of car = $75,000 + $11,250

Total cost of car = $86,250

We also need to take into account the trade-in and the other fees. The trade-in value of $9,500 and the other fees of $2,000 are subtracted from the total cost of the car:

Total cost of car inclusive of VAT and other fees = Total cost of car + Trade-in value - Other fees

Total cost of car inclusive of VAT and other fees = $86,250 + $9,500 - $2,000

Total cost of car inclusive of VAT and other fees = $93,750

Therefore, the cost of the car, inclusive of VAT, trade-in, and other fees, is $93,750.