Question

John wants to buy something that costs Rs.\[230\] before VAT is charged at \[0.5\% \]. Calculate the total cost after VAT is added.
A. Rs.\[234.5\]
B. Rs.\[239.1\]
C. Rs.\[239.4\]
D. Rs.\[231.15\]

Answer 1

Hint: Here we use the concept of percentage and taking the initial cost given in the statement of the question we add the VAT percentage of the initial cost to the initial cost we get the cost of the object after VAT.
* WE calculate \[m\% \]of x as \[\dfrac{m}{{100}} \times x\]
* VAT is the value added tax which is added to the price of any object as a tax.

Complete step-by-step answer:
The initial cost of the object costs Rs.\[230\] before the VAT.
VAT is the value added tax which means that it depends on the value of the object on which the tax is being applied.
Since, VAT is \[0.5\% \] of the cost.
From the method of calculation of percentage we can find the value of \[0.5\% \] of Rs.\[230\].
\[ \Rightarrow \]VAT \[ = \dfrac{{0.5}}{{100}} \times 230\]
Remove the decimal by multiplying the denominator by 10
\[ \Rightarrow \]VAT \[ = \dfrac{5}{{1000}} \times 230\]
Cancel the factors from numerator and denominator.
\[ \Rightarrow \]VAT \[ = \dfrac{{5 \times 23}}{{100}}\]
Multiplying the terms in the numerator.
\[ \Rightarrow \]VAT \[ = \dfrac{{115}}{{100}}\]
Write the value of VAT in terms of decimal by removing the denominator and placing the decimal in the numerator at second place from right side.
\[ \Rightarrow \]VAT \[ = 1.15\]
Final cost of the object \[ = \]Initial cost of object \[ + \]VAT
\[ \Rightarrow \]Final cost \[ = 230 + 1.15\]
\[ \Rightarrow \]Final cost \[ = 231.15\]

So, the correct option is D.

Note: Students are likely to make mistakes while calculating the percentage. They should not attempt to divide the fraction instead use the method of writing decimal to write the value whenever we have denominators like 10, 100 etc. Also, keep in mind the final cost is not the Value of VAT it is the final value after we add value of VAT to the initial cost.