**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,

**VAT ( Value Added Tax)**

**VAT** or Value Added Tax is a
government tax levied on the cost of cetain goods or services. The VAT rate is
usually in percent and is decided by the government. The rate of VAT varies
from country to country and there are certain goods and cervices 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,

**List of formulae on MP, Discount, SP and VAT**

*Worked
Out Examples*

*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,*

*∴** 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,*

*∴** 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,*

*∴** 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,*

*∴** 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 nuch was the discount?*

*Solution:** Here,*

*∴** 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.*

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