Question

2. A businessman buys mobile phones from Japan and brings them to Nepal and sells them. It cost 20,000 Japanese Yen per mobile phone including custom tax. He makes 20% profit on that price and sells it levying 13% value added tax. a. How much Nepali rupees does it cost the businessman to buy a mobile phone? (1 Japanese Yen NRs 1.06) [1] b. How much rupees does Sita have to pay to buy a mobile phone form the businessman? Find out. [2] c. At how much rupees should Sita sell the mobile phone to Hari after using it for 2 years at the rate of 10% per annum compound depreciation? [1] d. If Sita sells the mobile phone after 2 years at the rate of 12% per annum compound depreciation, compare how much less or mor money she will get if she sells it at 10% per annum compound depreciation. [2]​

Answer 1

The businessman's cost per mobile phone is 21,200 Nepali rupees, Sita has to pay 28,747.20 Nepali rupees to buy a mobile phone from the businessman, she should sell it for approximately 23,259.28 NRs after using it for 2 years at 10% per annum compound depreciation, and she will receive 936.49 NRs less if she sells it after 2 years at 12% per annum compound depreciation compared to 10% depreciation.

Step-by-step explanation:

The question involves a series of calculations to determine the cost and subsequent sale prices of mobile phones under different conditions, considering exchange rates, profit margins, value-added tax (VAT), and depreciation rates. These calculations would fall within a high school level mathematics curriculum, particularly within a unit on financial mathematics and economics.

a. Cost to the businessman in Nepali rupees

To find out the cost of one mobile phone for the businessman, we multiply the cost in Japanese Yen by the conversion rate to Nepali rupees:

20,000 Yen × 1.06 NRs/Yen = 21,200 NRs

b. Sale price for Sita including VAT

Firstly, we calculate the profit the businessman wants to make (20% of cost price):

Profit = 20% of 21,200 NRs = 0.20 × 21,200 NRs = 4,240 NRs

Then we add this profit to the cost price to find the sale price before VAT:

Sale price before VAT = 21,200 NRs + 4,240 NRs = 25,440 NRs

Now we calculate the VAT (13% of the sale price before VAT) and add it to find the final sale price:

VAT = 13% × 25,440 NRs = 3,307.20 NRs

Final sale price = 25,440 NRs + 3,307.20 NRs = 28,747.20 NRs

c. Selling price after 2 years with compound depreciation at 10% per annum

Using the compound depreciation formula:

Sale price after 2 years = 28,747.20 NRs × (1 - 0.10) ^ 2 ≈ 23,259.28 NRs

d. Comparison of selling price with 12% compound depreciation

First, calculate the sale price with a 12% depreciation rate:

Sale price after 2 years at 12% = 28,747.20 NRs × (1 - 0.12) ^ 2 ≈ 22,322.79 NRs

Now, calculate the difference compared to the 10% depreciation:

Difference = 23,259.28 NRs - 22,322.79 NRs = 936.49 NRs

Sita will get 936.49 NRs less if she sells at a 12% depreciation rate rather than at a 10% depreciation rate over the same period.