Question

The price of a telephone is £36.40 plus VAT. VAT is charged at a rate of 17.5%. a) Work out the amount of VAT charged.

In a sale, normal prices are reduced by 12%. The normal price of a camera is £79. b) Work out the sale price of the camera.

Answer 1

VAT = £5.42

sale price = £69.52

Explanation:

price before VAT = 100%

VAT = 17.5%

price after VAT = (100 + 17.5)%

= 117.5%

price after VAT : VAT = 117.5 % : 17.5%

£36.40 : VAT = 117.5 % : 17.5%

£36.40 : VAT = 47 : 7

47 × VAT = 7 × £36.40

VAT = £254.8 ÷ 47

= £5.42

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normal price = 100%

discount = 12%

sale price = (100 - 12)%

= 88%

normal price : sale price = 100% : 88%

£79 : sale price = 100% : 88%

£79 : sale price = 25 : 22

25 × sale price = £79 × 22

sale price = £1738 ÷ 25

= £69.52