Answer:
The difference between the price after value added tax (VAT) and the price after discount of an article gives us the actual amount of money saved by the customer.
The price after VAT is the price of the item including the tax imposed by the government, whereas the price after discount is the price of the item after any promotional or discounted price reduction. By subtracting the price after discount from the price after VAT, we can determine the actual amount saved by the customer, which is the discount amount minus any VAT paid on the original price.
For example, if an item originally cost $100 with a 10% VAT, the price after VAT would be $110. If the item was discounted by 20%, the price after discount would be $80. The difference between the price after VAT and the price after discount would be $30, which is the actual amount saved by the customer ($20 discount minus $10 VAT paid on the original price).
Explanation:
To calculate the actual amount saved by the customer, we need to follow these steps:
Determine the original price of the item. For example, let's say the original price of the item is $100.
Calculate the VAT amount paid on the original price. To do this, multiply the original price by the VAT rate as a decimal. For example, if the VAT rate is 10%, then the VAT amount would be:
VAT amount = original price x VAT rate
VAT amount = $100 x 0.1
VAT amount = $10
So, the VAT amount paid on the original price of $100 is $10.
Determine the discounted price of the item. For example, let's say the item is discounted by 20%, so the discounted price is:
Discounted price = original price - (original price x discount rate)
Discounted price = $100 - ($100 x 0.2)
Discounted price = $80
So, the discounted price of the item is $80.
Calculate the actual amount saved by the customer. To do this, subtract the discounted price from the price after VAT. For example:
Actual amount saved = price after VAT - discounted price
Actual amount saved = $110 - $80
Actual amount saved = $30
So, the actual amount saved by the customer is $30, which is the discount amount minus the VAT paid on the original price.