Question

Jacob buys a watch costing £84

This cost includes VAT at a rate of 20%.

How much is the watch without VAT?

Answer 1

To find the price of the watch without VAT, divide the total cost by 1 plus the VAT rate. The watch costs £84 with VAT and removing the 20% VAT results in a price without VAT of £70.

Step-by-step explanation:

The cost of the watch including VAT at a rate of 20% is £84. To find the cost without VAT, we need to reverse the VAT calculation. VAT is included in the total price, meaning the actual price is 100% and the VAT constitutes 20% on top of the actual price.

The formula for reversing the VAT is:

Cost without VAT = Total Cost including VAT / (1 + Rate of VAT)

So, let's calculate:

Cost without VAT = £84 / (1 + 0.20)

Cost without VAT = £84 / 1.20

Cost without VAT = £70

Therefore, the cost of the watch without VAT is £70.

Answer 2

So beacause the VAT costsnyou need to move the variable to the left then consider and then thr rate will turn to 0%