Marked Price, Discount and VAT

Marked Price, Discount and VAT

What are Marked Price, Discount and VAT?


Marked Price


The price which is listed or printed on the item or article for sell is called the marked price or labelled price of the item. It is denoted by MP.


Discount


When a shopkeeper reduces the marked price of any article and sells it to costumers, the reduced amount is called discount. Discount is usually given as a certain percent of marked price.


Thus,

Discount Amount = Discount percent of MP, Selling Price (SP) = MP – Discount Amount (Discount% of MP) and Discount percent = (Discount Amount)/MP  ×100%

VAT ( Value Added Tax)


VAT or Value Added Tax is a government tax levied on the cost of certain goods or services. The VAT rate is usually in the percentage and is decided by the government. 


The rate of VAT varies from country to country and there are certain goods and services which are free from VAT. For example, educational items, social welfare services, etc. are VAT-free good and services.


VAT is levied on actual selling price. So,


VAT amount = VAT percent of SP, SP with VAT = SP + VAT amount and VAT percent = (VAT Amount)/SP  ×100%

List of formulae on MP, Discount, SP and VAT


1. Discount Amount = Discount % of MP     2. Discount % = (Discount Amount)/MP  ×100%      3. SP = MP – Discount Amount     4. SP = (100 - d%)/(100 )  × MP     5. MP = 100/(100 - d% )  × SP     6. VAT amount = VAT percent of SP     7. VAT percent = (VAT Amount)/SP  ×100%     8. SP with VAT = SP + VAT amount     9. SP with VAT = (100 + v%)/(100 )  × SP     10. SP = 100/(100 + v% )  × SP with VAT     11. MP = (100 × 100)/((100 - d%)(100 + v%))  × SP with VAT     12. SP with VAT = ((100 - d%)(100 + v%))/(100 × 100)  × MP


Worked Out Examples


Example 1: The marked price of a book is Rs. 200. If a discount of 10% is offered. Find the selling price of the book.


Solution: Here,

MP = Rs. 200 Discount = 10% SP = ? We know, 	SP = MP – discount amount 	     = 200 – 10% of 200 	     = 200 – 10/100 × 200 	     = 200 – 20 	     = Rs. 180


Selling price of the book = Rs. 180.

Example 2: A shopkeeper allowed 10% discount in a watch of marked price of Rs. 600. If he got 8% profit, find the cost price of the watch.


Solution: Here,

MP = Rs. 600 Discount = 10% Profit = 8% SP = ?  CP = ? We know, 	SP = MP – discount amount 	     = 600 – 10% of 600 	     = 600 – 10/100 × 600 	     = 600 – 60 	     = Rs. 540 Now, 	CP = 100/(100 + P%)  ×SP                  = 100/(100 + 8)  ×540                  = 100/108  ×540                  = Rs. 500


The cost price of the watch = Rs. 500.


 

Example 3: The marked price of a computer is Rs. 30000. If it is sold after 20% discount and then 30% VAT is levied in it. Find the price of computer including VAT.


Solution: Here,

MP = Rs. 30000 Discount = 20% VAT = 13% SP with VAT = ? We know, 	SP with VAT = ((100 - d%)(100 + v%))/(100 × 100)  ×MP 	     	          = ((100 - 20)(100 + 13))/(100 × 100)  ×30000 	                      = (80 × 113)/(100 × 100)  ×30000 	     	           = Rs. 27120


The price of computer including VAT = Rs. 27120.


 

Example 4: After allowing 15% discount on the marked price of a radio 13% VAT is levied, then the cost of radio becomes Rs. 1997. Find the marked price of the radio.


Solution: Here,

SP with VAT = Rs. 1997 Discount = 15% VAT = 13% MP = ? We know, 	MP = (100 × 100)/((100 - d%)(100 + v%))  ×SP with VAT 	      = (100 × 100)/((100-15)(100+13))  ×1997 	      = (100 × 100)/(85 × 113)  ×1997 	       = Rs. 2080 (approx.)


The marked price of the radio = Rs. 2080.

Example 5: After allowing 20% discount on the marked price and then levying 10% VAT, a radio was sold. If buyer had paid Rs. 320 for VAT, how much was the discount?


Solution: Here,

MP = Rs. x (let) Discount = 20% VAT = 10% VAT amount = Rs. 320 We know, 	SP = MP – discount amount 	     = x – 20% of MP 	     = x – 20/100  ×x 	     = (100x - 20x)/100      = 80x/100 VAT amount = Rs. 320 i.e.	10% of SP = 320 or,	10/100 × 80x/100 = 320 or,	8x/100 = 320 or,	8x = 32000 or,	x = 32000/8 or,	x = Rs. 4000,  ∴ MP = Rs. 4000 ∴ Discount amount = 20% of MP 		        = 20/100 × 4000 		        = Rs. 800


Rs. 800 was the discount amount.


 

Do you have any question regarding Marked Price, Discount and VAT?


You can comment your questions or problems here.

7 comments:

  1. The lebelled price of a radio is Rs 5210. If the shopkeeper allows 10% discount and adds 10 % VAT then,
    (i) How much will a customer pay for the radio
    (ii) Find the difference between marked price and selling price

    ReplyDelete
    Replies
    1. Here is the solution to your problems,
      [image src="https://1.bp.blogspot.com/-OFNH4wAyeUI/YBANRVpvq_I/AAAAAAAAHaE/G_dqWX5adygxeMDgK3TYxIot-3upgCgbACLcBGAsYHQ/s598/comment%2B-%2Bsolution%2B1.png"/]

      Comment here, if you have more problems regarding marked price, discount and vat.

      Delete
  2. Reasonableness: While protection rates have expanded at twofold digit rates in the course of recent years, discount card suppliers have kept their rates for all intents and purposes unaltered. Coupons

    ReplyDelete
  3. the mp of a laptop is rs.75000. after allowing a certain percent of discount and including 15%VAT, the laptop is sold at rs.73312.5.calculate the discount percent and VAT amount

    ReplyDelete
    Replies
    1. Here is the solution to your problems,
      [image src="https://1.bp.blogspot.com/-6GL598P5ZEM/YGXk2d9pkKI/AAAAAAAAIBQ/pQCjpL-oW14WbBHydF4iGblUFzhxiUe3wCLcBGAsYHQ/s16000/Comment%2BSolution%2B2.png"/]
      Comment here if you have more problems regarding marked price, discount and vat.

      Delete
  4. the marked price of an article is rs 10000 and the shopkeeper allows some percent discount and adding some percent vat which is 3% more than the discount percent. if the customer pays rs. 10170 for the article then find discount percent

    ReplyDelete
    Replies
    1. Here is the solution to your problems,
      [image src=" https://1.bp.blogspot.com/-3jeSIOW6Juo/YHW7YahTdWI/AAAAAAAAIEg/JRuYw3UvG586bm6rLFCYK7IQSmr6cAcvQCLcBGAsYHQ/s16000/comment%2Bsolution%2B3.png "/]
      Comment here if you have more problems regarding the marked price, discount and vat.

      Delete