Question

Mohit purchased a refrigerator at the list price of rupees 16000. If the GST charged was 10%, find the amount he had to pay for purchasing the refrigerator.

Answer 1

Hint: Calculating GST is probably easier than you think. All you have to do is multiply the amount of your item or total of items by the GST.
The calculation of GST is very easy as it involves a very simple concept of percentage.
If P be the printed price or marked price of a commodity, the rate of GST be r% and S be the selling price (i.e., the price a customer has to pay) then
\[S{\text{ }} = {\text{ }}P\left( {1{\text{ }} + \;\dfrac{r}{{100}}} \right)\] and \[GST{\text{ }} = {\text{ }}S{\text{ }} - {\text{ }}P{\text{ }} = \;\dfrac{{Pr}}{{100}}\]
So we will just put in the values in the above formula and find the selling price in the below mentioned solution.

Complete step-by-step answer:
For the following transaction:
Given cost of fridge or printed price =Rs. 16000
Rate of GST = 10%[tax that must be paid extra]
So, we need to pay extra 10% on the printed price.
The total amount he need to pay is =
\[S{\text{ }} = {\text{ }}P\left( {1{\text{ }} + \;\dfrac{r}{{100}}} \right)\]
$ \Rightarrow S = 16000\left( {1 + \dfrac{{10}}{{100}}} \right)$
Convert the GST rate to a decimal by moving the decimal two places to the left and removing the percent symbol. Our multiplier then becomes 0.1.
$ \Rightarrow S = 16000\left( {1 + 0.1} \right)$
Multiply 0.1 by 16,000 to get 1600. Rs. 1600 is the amount of GST you’ll be paying on the refrigerator. Add your GST to the price of the refrigerator for the total price of the refrigerator. 1600 + 16000 = Rs. 17,600.
$ \Rightarrow S = 16000\left( {1.1} \right) = 17600$

Therefore, the amount he had to pay for purchasing the refrigerator is Rs. 17600.

Note: The percent symbol is used to tell you something about the number it sits beside. Percent means ‘parts per hundred’. So if a percent sign sits beside a 6, it really means 6 parts per 100. You don’t need to know this to calculate GST but it might help you to understand why you need to convert the percent to a decimal to begin with. Do you remember what the decimal places mean? The first decimal place is the tenths place and the second is the hundredths place. This is why when we convert our percent we have to move two places. Just be careful while calculating the GST about percentage and decimal.