Question

The market price of a branded school bag is Rs.780. The shopkeeper allows a discount of 10% on each payment. If VAT is 7%, find the amount the customer has to pay in cash to purchase it.

Answer 1

Hint: We will first calculate the amount of discount and then subtract it from the marked price to get the selling price of an item. Then, find the amount of VAT on selling price and add it to the selling price to get the actual price a customer has to pay.

Complete step by step Answer:

We have been given that the marked price of a school bag is Rs.780 and the shopkeeper will give a discount of 10%.
First of all, find the amount that is given a discount on the bag whose cost is Rs. 780
We will calculate a 10% discount on Rs.780.
That is, $\dfrac{{10}}{{100}} \times 780 = 78$
This implies, there is a discount of Rs.78 on the school bag of Rs. 780.
Now, we will calculate the price of the bag after the discount is given by subtracting 78 from 780.
$780 - 72 = 702$
Here, the customer will also have to pay a VAT of 7% on Rs. 702
Therefore, the amount of VAT on Rs. 702 is $\dfrac{7}{{100}} \times 702 = 49.12$
Then, the total amount the customer will pay is the sum of 702 and 49.12.
$702 + 49.12 = 751.12$
Therefore, the customer will have to pay Rs. 751.12.

Note: Many students make mistakes by calculating VAT on the marked price and not on the discounted price. One must note that VAT is calculated on the selling price and not on the marked price. The selling price is calculated by subtracting discounts from the marked prices.