The marked price of an article is $4500 and the rate of tax is 8%.A shopkeeper buys the article at some discount and sells it to a customer at its marked price.If the VAT paid by the shopkeeper to the government is $72.Find:
The price paid by the shopkeeper to buy the article inclusive of tax,and;
The % of discount he received.

Question

The marked price of an article is $4500 and the rate of tax is 8%.A shopkeeper buys the article at some discount and sells it to a customer at its marked price.If the VAT paid by the shopkeeper to the government is $72.Find:
The price paid by the shopkeeper to buy the article inclusive of tax,and;
The % of discount he received.

aaronandyson · Answer

@Michele_Laino

michele_laino · Answer

I'm thinking, please wait...

michele_laino · Answer

If the marked price is 4500, then is the VAT paid to governement equal to:
$4500 \cdot 8/100$?

michele_laino · Answer

I think that the price $x$ paid by the shopkeeper is given by the subsequent equation:
$$x + 72 + \frac{8}{{100}} \cdot \left( {x + 72} \right) = 4500$$

aaronandyson · Answer

VAT to the government is given as $72

michele_laino · Answer

and $8 \% $ is not  a VAT, right?

aaronandyson · Answer

8 is rate of tax.

aaronandyson · Answer

8%*

michele_laino · Answer

I think that the right equation is the equation above, namely:
$$\left( {x + 72} \right) + \frac{8}{{100}} \cdot \left( {x + 72} \right) = 4500$$

aaronandyson · Answer

What does x represent?

michele_laino · Answer

the shopkeeper buys the article to a price $x$ and then he pays the VAT, so he spends $x+72$ in total, right?

michele_laino · Answer

am I right?

aaronandyson · Answer

His price inclusive of tax is 4500*108/100 that's  4860

michele_laino · Answer

question:
have I add the VAT to the marked price, before taxes or after taxes?

aaronandyson · Answer

VAT = tax charged - tax paid

aaronandyson · Answer

OR
Vat = tax on profit

michele_laino · Answer

do you have the options?

aaronandyson · Answer

No options.

michele_laino · Answer

please follow my reasoning, and tell me if I am wrong

michele_laino · Answer

the shopkeeper buys the product to a price x, then he has to pay tax which is 8%, so he pays in total: x+ 8% x, am I right?

aaronandyson · Answer

The priice he buyed the article is given as $4500(exclusive of tax)

michele_laino · Answer

sorry he buys that article at a discount, so I think he pays a price less than 4500, right?

aaronandyson · Answer

Yes,and we have to calculate the discount

michele_laino · Answer

so he pays a price $x$ and with tax, such price is $x +0.08 \cdot x=1.08\;x$

michele_laino · Answer

Now i add $72$ so i get this equation:
$(1.08 \cdot x)+72=4860$

aaronandyson · Answer

4500 adding the tax 360 he pays 4860

michele_laino · Answer

question:
is the expression $1.08 \;x +72$ the price paid by the shopkeeper?

aaronandyson · Answer

no

michele_laino · Answer

I think that the shopkeeper pays a price of $x+72$, so we can write the subsequent equation:
$x+72=4860$

michele_laino · Answer

and the $\%$ of the discount is: $(72/x) \cdot 100$

phi · Answer

I don't fully understand the question, but using
Vat = tax on profit
we can say
0.08* profit = 72
profit = 72/0.08= 900

If he sells at 4500, with a profit of 900, that means he bought it for 3600

aaronandyson · Answer

Marked price means the price marked on the article during its production

aaronandyson · Answer

Sale price is the marked price + tax