Question

Suppose the price of a pair of shoes, including 14% vat is R240. The price of the pair of shoes is reduced by 15% on sale. What is the reduced price of the shoes including VAT?

Answer 1

$204

Explanation:

First, you have to find the price without VAT. To calculate it you have to divide the price including VAT by one plus the rate:

Price including VAT= $240

VAT= 14%

240/(1+0.14)= 240/1.14= 210.52

Now, you have to calculate the 15% of 210.52 and subtract that amount from the price:

210.52*0.15=31.57

210.52-31.57=178.95

Then, you have to calculate the 14% VAT by multiplying the price for 1 plus the rate:

178.95*(1+0.14)= 178.95*1.14= 204

According to this, the reduced price of the shoes including VAT is $204.