Question

The price of a hotel is £126 including 20% VAT how much was the hotel before the VAT is added

Answer 1

Answer: If the price of the hotel including 20% VAT is £126, we can use the following formula to calculate the original price of the hotel before VAT is added:

Original price = Final price / (1 + VAT rate)

In this case, the final price is £126, and the VAT rate is 20%, or 0.2 in decimal form. Substituting these values into the formula, we get:

Original price = £126 / (1 + 0.2)

Original price = £126 / 1.2

Original price = £105

Therefore, the original price of the hotel before VAT was added is £105.

Explanation:

Answer 2

To find the original price of the hotel stay before the 20% VAT, divide the total cost by 1.20, resulting in £105 being the pre-VAT price.

The student asks how to calculate the original price of a hotel stay before a 20% Value-Added Tax (VAT) was added.

This is a common mathematics problem involving percentages that high school students encounter.

To find the original price before VAT, one should divide the total cost by 1.20, as the total cost is 100% of the original price plus the 20% VAT.

So in this case, we perform the following calculation:

£126 ÷ 1.20 = £105

Therefore, the original price of the hotel before 20% VAT was added was £105.