COMMERCIAL MATHEMATICS Objectives After studying this chapter, you will be able to: + Explain percentage increase and percentage decrease * Calculate cost price, selling price, profit, loss, profit percentage, and loss percentage * Recognise overheads as part of the cost price ‘+ Explain the relationship between marked etween marked price, selling price, and discount *+ Recognise different types of taxes levied in commercial activities. FINDING INCREASE OR DECREASE PERCENTAGE ‘We have studied percentage in detail in Class VII In this chapter we will be discussing in detail, the applications of percentage. Per cent is used to calculate increase, decrease, growth, decay, etc. Let us recall the following: increase in amount Percentage increase = «100% ‘original amount decrease in amount original amount Example 1: Find the percentage decrease in the price of a skirt when it decreased from % 800 to % 640. Solution: Original price = ® 800 Percentage decrease = 100% New price = 640 Decrease in price = % 800 ~ 640=¥ 160 Thus, percentage decrease = 100% = 189 100% = 20% 800 Example 2: Shaji, who is working as an officer for his company, was given an increase in his monthly salary from & 30,000 to & 36,000. Rekha, who is working for another company, got an increase of 20% in her monthly salary. Who got a higher increment? New Enjoying Mathematics ® = % 30.000 Svlition Shaji’s original salary The increase in salary = & (36000 - 76000 increase in amount 1 g4 30000) Pe werntage increase = vemlage iNCTEASe ~ “ Griginal amount = £009 100% = 20% 30000 “Thus, Shaji and Rekha got the same percentage of increase in their salaries. This does not mean that Rekha also got % 6000 increase. The change depends on the original salary of Rekha. Suppose Rekha’s original salary was 20,000, and the increase in her salary was 20% of heroriginal salary. This will be calculated as follows, Method 1 For ® 100 original salary, the increase will be & 20. For & 20,000, the increase will be 2020,000 _ g 4ogy 100 So, her new salary = € (20,000 + 4000) = 24.000 Method 2: Original salary ~% 20,000 Increase in salary = 20% of 20000 = 4000 New salary = & (20000 + 4000) = % 24,000 ‘ote: The percentage is calculated on the original amount. Example 3: Jagdev’s commission as a sales agent of books this month was % 35,840. This was an increase of 12% from last month’s commission What was his last month's commission?Solution method Let us assume that the original commission is & 100. ‘Then the increase is & 12, and the present commission will be 100+ 12=% 112 ifthe present commission is & 112, the last month’s commission = & 100. : => 35840" ,.100 = 12% => (358401) x 100 => 3584000— 100: => 112 = 3584000 => x= 3584000 112 ‘Thus, the last month's commission was & 32,000. = 32000 ifthe present amount is % 35840, last month's 100% i 32,000 7 1 The price of a bag was & 1500 last year. It has increased by 30% this year. What is the price now? 2. Find the percentage decrease ifthe cost of an article has decreased from @ 90 to & 70. Let the last month’s commission be & x. Increase in amount = % 35840 — x increase in amount Percentage increase = original amount 100 = 12% Exercise 9A 1 Find the percentage increase or percentage decrease in each case. a Last year the bus fare was & 50. This year it is & 60. b Five years back the telephone charges per minute were € 2 and now they are & 1.50 per minute Population of tigers in the sanctuary now is 5500. Five years back there were 6600 tigers Cost of 1/ milk was declared & 46. Earlier it was € 40. The production of cars last year was 32,000. This year it is only 28,000. The builders used to charge customers & 2500 per square metre and now it has become ® 3750 per square metre. In 2015, a dealer sold 7200 motorbikes. In 2016, the dealer sold only 6300. Raju saved € 80,000 last year. This year he saved @ 1,00,000. The cost of a sweet dish has gone up from & 60 to & 75, The charges of dry cleaning a suit have gone up from & 150 to ® 200. 2 During the last 5 years, the population ofa town that had 12,00,000 people increased by 15 per cent. ‘What is the present population of the town? } Shiv went to a restaurant and ordered a pizza. When he saw the bill, he was surprised to notice that it was 330 which was 10% more than the bill he got last time. What was the price of the same pizza when he came last time? 4 This year Mr. Chatwal’s apple orchard gave a bumper crop of 25% more than last year, If this year’s crop was 90,000 kg, what was the amount of apples he had last year? 5 Accomputer costs ® 39,600. In the last 6 months, the price had come down by 12 per cent, What was the price of the computer six months back? 6 If 120 is reduced to 96, what is the reduction per cent? 7 Ranjan got 45% marks inthe first paper and 70% in the second paper. How much per cent should he get in the third paper so as to get 60% as overall score? 8 The population of a village when increased by 15%, becomes 19,320. What was the original population? c a e f 4DVLNIDNad 40 SNOLLVIITddV¥COMMERCIAL MATHEMATICS ay PROFIT AND LOSS We find that new shops are coming uP us. New commercial complexes are bein New industries are being started. They are to produce profits. A shopkeeper buys things for sale and pays for it. An industry or factory produces things for which it spends money on raw materials ‘machinery. labour, advertisement, etc.. which are Part ofits expenses to produce and sel products These expenses form the cast price (CP). When the shopkeeper sells the product, or the industry oF factory supplies the products to retailers. what they receive is the selling price (SP), We will be using the following terms in this chapter all around ng bul. I meant * Cost price + Loss per cen * Selling price * Marked price * Profit and loss * Discount + Overheads + Sales tax * Profit per cent * VAT ————=g ae e 700 ** G00 ** IFais the whole quantity, then x% of a= xa quantity then 2% of a= * IF 6 of the whole quantity sb, then the whole quantity = 2*100 “p ++ Cross mulkiplication ax beexd id ’ then a =F ande~ 22 + Cost price (CP) isthe price at which the article is purchased + Selling price (SP) isthe price at which the aril is sold 'SP- CP = ProficifSP> CP CP-SP = LossifCP> SP SP = CP + Prof CP = SP- Profit SP = CP-Loss CP = SP + Loss | ifthere isa profc } ifchere isa loss Profit % ~ Prof « 109 © Loss % = 128 x 100 ©. Sy New Enoving Mathematics8 fhe selling PFICE #8 More thy, profirand if the selling phe fe, there is. lass, Prog isa, We kno that Toat price. there iP Fees than the cast PFE called ga" an and Rajan each Bought a exam fey The cost ofeach tho “ in a house ra while they both sold the FANE A ena Sajan gor © 180 ean = SH 9.00 fo is house Who mage ¢ of the house (CP) «cost pric Sofie MEE 6,00.000 an, SP ~& 18,00,000 18.00,000 — 16,00,000 2 2,00,000 ; 19,50,000 «case of Rajan. SP i ret 1950.00 ~ 16,00,000 = 3.50.00 i conclude that Rajan gota bet t al ice & $0,000 as profit, and Sajan got" oan F100,000 as profit even though they both sted the same amount. ought a watch for ® 800 (. Dinkar bought a car for 200.000 and sod it For & 4.20,000. Who made better sale, Sanjay or Dinkar? Solution: Sanjay got only & 200 as profit. Dinkar got € 20,000 as profit ‘We are bound to think that Dinkar had better deal But it may not be true. For an investment of € 800, Sanjay got % 200 whereas for an investment of & 4,00,000, Dinkar got & 20,000. inves Example 5: Sanjay and sold it for & 1001 In the case of Sanjay, for an investment of & 800, the profit is & 200. 200 800 200 ‘$00 * 100 = 25 For 1 investment his profit = 2 For & 100 investment, his profit When the profit is caleulated on 100, we call it percentage of profit So, Sanjay’s profit rate or percentage of profit is 25%, In the case of Dinkar, for an investment of € 4,00.000, the profit is % 20,00020.000 for € 1 the prof = Fr oop e 0,000 * 100 wr 100, the profit = "80100 _ For’ 4,00,000 7° 5 ys Dinka’ profit percentage is 5, Tema’ fe apply the Formula, we observes nthe e of Sanjay— (p= £800. SP=% 1000 ie. SP? CP profit = SP~CP=¥ 1000 ~ $00 = 209 Profit 200 9 = x 100 = 20 109 = 250 profit "= Cp 800 * 100= 25% nthe case of Dinkar p= 4,00,000, SP= 2 4,20,000 since SP> CP, Profit= SP CP =4,20,000 —4,00,000 = eS ne ee 20,000 Prost 7 00,000 . Sanjay makes 25% profit and Dinkar makes ly 8% profit on their respective investments, . Sanjay made a better sale, nu: The profit percentage and the loss percentage are always, cated on cos price a the base. Example 6: Rahul purchased a cycle for ® 800 and _ sold it for ® 1040. Find his gain per cent. ion CP =% 800, SP=% 1040 Profit = 1040 ~ 800 = 240 Profit on % 800 = 240 40. i * 100 = 30% Profit percentage wmple ~: Santosh bought a refrigerator for 9000 and was forced to sell it for ® 8100. ind the loss per cent. CP=% 9000, SP =% 8100 __ Loss = CP SP = 9000 ~ 8100 = % 900 900 x 100 = 10% ie 5000 * 10 Example 8° Oranges were bought at ® 36 per dozen _andsold at the rate of & 40 per 10. Find the gain or HOSS per cent. So BSolucion Loss per cent “on Cost of 12 oranges =% 36 Cost of | orange = 36 + 12=%3 Selling price of 10 oranges = € 40 Selling price of 1 orange = 40 + 10=%4 ere SP > Cp, Profit on | orange =%4~%3=@1 Profit per c 1 1 =+«100=334% t= 3 * 100=33, Example 9: The cost price of 11 pencils is equal to the selling price of 10 pencils. Find the loss or gain per cent, whatever may be the cost of I pencil SP of Solution: The cost price of 11 pencils 10 pencils. Let us consider that the CP of I pen The cost price of 10 pencils = % 10 The selling price of 10 pencils = Chat 11 pencils Profit on 10 pencils =% 11-2 10=2 1 ist 1 Profit per cent = 75 * 100= 10% Example 10: By selling a saree for ® 864, GC a shopkeeper earns a profit of 8%. Find the cost price. Solution: Let the cost price be & 100 Recall that per cent means per hundred. 39 ae 8% means 755: Profit % = 8% 8 == -x100= Profit = 55 8 SP =CP + Profit SP = 100+8=2 108 If SP is @ 108, CP =% 100 If SP is 864, CP = 1 x 864 = € 800 Example 11: Aman had to sell his television at a loss of 12%. If the selling price was % 7040, what was its cost price? Solution Let CP =% 100 Loss = 12% SP = 100~12=7 88 IFSP is % 88, then CP = % 100. If SP is % 7040, then CP = - x 7040 = € 8000, Example 12: Sanjay sold his old dining table at a loss of 20%. If he had sold it for & 800 more, he would have received a profit of 5%. Find the cost price. Solurion: Let the cost price be & 100. ADVLNI9Y9d 40 SNOILVIITdd¥ New Enjoying Mathematic EyCOMMERCIAL MATHEMATICS So, when CP=2 100, loss of 20% means - SP= 100-20 =2 80 R Profit of 5% means SP = 100 + 5 =¥ 105 The difference of wo SP = 105 _ 80-8 25 Proft=108 6 56595 - (Los, the difference is % 25. CP —z 100 « profit %= | “Cost Pri =u ice when selling price ang If the differenc 100 # To find cost pri 4 bro, ference is % 800, CP 5 * 800= € 3200 Te os are give saaemnnt 100__x sp; cp= — : CP 750% profes 00 rice when cost price and «To find selling P* ro 1. Naveen purchased a car for & 8,00,000 and sold it are given for 8 6,50,000. Find his loss per cent. oi 2 Bananas were bought at € 50 per dozen and sold at p= 100 prof , cp, gp. 100 the rate of & 55 per dozen. Find the gain per cent. 2 100 Exercise 9B a ee eee 1 Find profit/loss. 2 Find cost price/selling price. CP(in%) — SP(int) Profit. Loss cp SP Profit Log a -1,85,000 —_2,00,000 a & 7282 @ 208 5 b 850 732 b % 572 % 72 « 3785 4245 ef | 95e4 a fe 4 4892 4900 d 1973 % 273 e — 3,67,000 —_3,81,400 © %6,76,000 - — % 18,5 r 784 682 f 7894 ae Arun buys a car for ® 4,46,000 and sells it for € 5,20,000. What is his profit? 4 Mohan had to sell a saree for & 1700, for which he had paid % 2000 when he had purchased it. What his loss? 5 Find the profit percentage. © Find the loss percentage and the SP (where EMOTES cae Frank amount is given), a © 320 € 384 cP SP Loss Loss b © 760 & 798 a % 3650 & 2920 © ©3400 %3808 b © 380% 361 4 € 2500 2700 © ©4780 % 4275 z 3750 4125 d 8 ais 2163 © 2 40 oo 7. By selling a bicycle for € 819, Vinay loses 9%. At what price should he sell it to make a profit of 5" 8 Raman sells two wristwatches for 1200 each. On one watch, he ga he los 20%, What ae the cost prices oF each, and what is his total gain ox te oe on the other gc? 9 Leela sold her gold necklace at a profit of 7%. If she had sol ot 10% profit. Find the cost price. sold it for % 294 more, she would have f ew Enjoying Mathematics 8gat was Sold by a shopkeeper at a gain of $94, 1 Ns less he would have suffered a loss of s, _ pwoisho ove purchased 100 notebooks fo oaks had to be thrown aw 5 uit Ay asa few w notebooks were sold \ roailer bought a mixie from a wholesa 1 yd. Find his profit or loss per cent, \ tint vendor buys oranges at the Find his gain per cent. bike OVERHEAD EXPENSES piss thrives on buying and selling. Shop- jovpers buy things to sell them later. But have to spend more money on it vine selling, For example, when a shopkeeper fuysthings from another state or country and rings tt his place for sale, he has to spend come money for transportation of the material, Sovetinies he may have to spend money for aivertising in newspapers, TV, Internet, etc., to mnike people know that he has those things for sae. Aw, certain things may have to be repaired or ranted. [fit is a plot of land or a house or a flat, bemay have to build a boundary wall or renovate it ‘omake the place more attractive for the customers {the people who buy it). All such things need extra oney over and above the cost which he has paid. Thisalso becomes his investment, or the real cost he item, This extra expenditure before sale is called he overhead expense. canes th So, Cost Price + Overheads = Real Cost Therefore, profit or loss must be calculated on this os, /sumple 13: Ravi bought a second-hand car for 1.25.00 and spent % 15,000 for repainting it. If hesold i for & 161,000, what is the profit per cent? von: The money Ravi spent on repainting is #0 part of the expenses he incurred for making ar saleable, So, it is a part of the cost price. *1.25,000, Expenses = & 15,000 ‘fore, real CP = & 1,40,000 S=81.61,000 1 uy selling @ motoreycle for & 56,320, the shopkeeper loses 12 Iithad been sold for ‘Find the cost pri 15 each, However, es Pages were torn from them. The ; tT 18 cach, Find the gain or loss per cent. le dealer for ® 4500 and sold it for Fate of 5 for 8 40 and sells them at & 9 per Find the price he had paid to buy the Profit = SP cP = 221,000 Profit perc 15% Example 14: Jaikishan bought a plot of land for % 22,00,000. He built a boundary ‘wall around it which cost him © 1,95,000. He advertised in the local newspaper about his intention to sell it, which cost him & 5000, He was finally able to sell it for & 27,00,000. What is his profit per cent? Solution: Cost of land = & 22,00,000 Overheads a Boundary wall = & 1,95,000 b Advertisement = 5000 Total overhead expenses = 2,00,000 So, the real cost = 22,00,000 + 2,00,000 %24,00,000 Selling price = & 27,00,000 => Profit = 2700000 - 24¢0000 = & 3,00,000 Profit per cent = x real cost — 300000 2400000 Example 15: Rajesh bought a motorcycle for % 27,000 and bought some accessories for it to make it look good. He sold the bike at a profit of 10% and ata selling price of @ 33,000. How much did he spend on the accessories? Solution: Let the CP be & 100, Profit = 10%, so the SP= 8 110, X100 = 12.5% New Eojoning Mathematics 3DVLNIDU3d 40 SNOILVII1dd¥IFSP is € 110, cost price ~ € 100. 100 IESP is & 33,000, cost price = 75 * 38000 2 30,000 The cost at which he bought ~ © 27,000 Cost of accessories = % 30000 - 27000 33000 — © Overheads refer to the extra costs incurred by the buyer on the item bought before selling it ‘+ Real Cost = Cost Price + Overheads Sy DISCOUNT These days, when we enter a market, we see posters and boards announcing discounts: especially during festival seasons. all shopkeepers try to attract the customers. By giving a discount, the shopkeeper intends to sell his products at a reduced price than what is originally marked as the price of the product. So, the items which are sold at a reduced price in this way have three types of prices. One is cost price, the price that the shopkeeper has incurred in procuring the product. The second is the marked price or list price. This is the price marked on the product. If there is no discount, the marked price is also the selling price. But to attract more customers, shopkeepers offer them a rebate or reduction in the price. This price is the actual selling price. The rebate (or reduction) given is called the discount. The rebate or reduction expressed in terms of percentage of the marked price is called the discount rate or discount percentage When a shopkeeper announces, say, 20% discount, what he means is that he will reduce his selling price by 20%, It is really a 20% reduction on the marked price AUMMERCIAL MATHEMATICS ea isthe price at which an item Post Price (CP) ased rice printe pach ce (MP) iste re Pit ony = Marke items ye reduction giver O” the mary ‘opkeeper ‘he Net Price isthe price paygy, ‘discount from the marke = Marked Price ~ Selling Price ‘ Discount 599 tor D% = Np then MP = SP. | unt, |e If there is NO discount, | » Marked Price ~ 500 -0% at 1-05) «s Selling Price ~ MP*| Taq if two or more discounts are allowed on the san jtem one after the other, then such discounts are termed as successive discounts. They are also known as discounts series. Example 16: The price marked on a book is ® + The shopkeeper gives 20% discount on it in ab exhibition. What is the selling price? Marked price = & 450 Discount = 20% of 450 20 Solution 450 = 790 100 SP = MP - Discount St selling price = 450 ~ 90 = 8360 xample 17: The marked et price of an article is Ifitis sold at & 72, what is the discount percent: Solon. Marked price = % 80 Selling price = % 72 Discount = MP ~ sp=%8 Discount % =P x 100 MP Discount percentage = ® Example a aampe P3(0,shoPkeeper announced a tes! Jagdish bough 27 3H the items in his shop ‘ht a mobile phone for himself. HF 100 = 10°sn of € 960. What was thelist price ofthe i? Example 2i: A shopkeeper was selling all his tems Discount = 2 960 at 20% discount. During the off-season, he offered %= 30% 25% discount over and above the existing discount aaa ~* IF Rohit bought a pullover which was marked 1200, how much did he pay for it? Disc Discount % = MP x 100 Method 1 he values a Soluion: Marked price = 1200 od 1200%20_ 5 4, ee First discount = 20% =, ~ * 240 30 * MP =960 100 Selling price after the fist discount ct =% 960 960 x 100 200 - 240 eae Second discount = 25% of € 960 MP=% 3200 =F «960 = #240 1: A shopkeeper has marked one article The selling price after the second discount {p, dove the cost price. Then he announced = 960-240-0720 {count of 20% on the article, Find the selling price, Rohit paid & 720 for the pullover. ppt and the profit percentage after the discount “ic ovsinal cost price of the article was & 750, vo 7 a cp =2750 lon Te marked price=¢ 120 First 80. Marked price = @ 750+ (2230) itst discounted price = 1200 » +7, 80, 75 =2750+375=8 1125 Second discounted price = 1200 » $9 7 201125 =2720 Discount = 20% = =“o9 = 8 225 Hence, SP= % 720 SP =¥ 1125 -% 225 =% 900 Profit = SP CP = 900-750 =% 150 150 1 Find SP, if MP = € 7000, discount = 30% Profit percentage = 755 * 100 2 Find discount, if MP = 1000, SP ~ & 850. F-cple 20: A television set was sold for ® 5760 3 Find MP, ifSP = & 4250, discount = 15%, eiving successive discounts of 10% and 20%, | 4 Rakesh bought a second hand cycle for 3500, spectively. What was the marked price? then spent 8 500 om its repairs and sold it for % 4300. Find his loss or gain per cent. Selling price = % 5760 Lethe MP be & 100. First discount = 10% ~ " ————ay So, selling price = 100 - 10=% 90 prea Second discount = 20% = 20% of € 90 *Iffisthe discount per cent on a marked price x, 20 then discount = xx =~ . 22 99 =8 18 100“ 0% 00 * Ifa discount of amount is available on the marked price, then the discount per cent = 2 » 100, ‘The discount is always on the marked price/list price. | « Selig Price = Marked Price ~ Discount Poe rice after the second discount i = 90-18 =%72 “selling price is & 72, MP=® 100 "SPs 5760, mp =" 5760 = € 8000 FOVLNIDYId 40 SNOILVIITdd¥ 5KCOMMERCIAL MATHEMATICS. Exercise 9¢ 1... 1. --* 16. He spe Pent and brought it to his villa 1A shopkeeper bou: neal ht fertilizers worth & 8000 from the © SO ech should he on transportation, ithe wants to wnake an overall profit of 20% for how much should he sell the mt material? : i and he repaired it by spending € 825. IF Ravi exp, A ape recorder was bought by Ravi for 1678 a get a profit of 8% on his sale, what should be the selling price : 3. Azad bought toys worth & 75,000 for his toy shop. He spent some money en transportation, relay shop, and the salary forthe salesman, If he made a profit of 1076 08 MS 22 Ps O8t + oer | penses. expenses), which were % 9000, calculate his overhead ex Sania sold the house at a profit OF 20%. I the sj, 4 After spending % 75,000 for remodelling a house. a Price was € 36,00,000, how much did she spend to buy the house 5 Find the discount and the selling price. S.No. Item Market price (MP) Discount rate Discount sP a Saree = 2300 20% b Radio 4700 25% © | Crockay set z224 Bp% 4d Cycle 3700 10% 6 Find the discount and the discount percentage, S.No. | Item MP (in 2) SP (in ®) Discount Discount rate a Penset 140 105 b Sewing machine 1300 1235 © Fan 1500 1200 14,500 13,775 dd Washing machine 7 Find the marked price. SP(in®) Discount rate Marked price S.No. Item a Sofa set 9000 10% b Dining table 16,000 20% © Double bed 10,200 15% 900 25% Centre table eper offers 10% discount on all his items. During the festival season, he decided to gi¥é 8 Ashopket m et and above the existing discount. Find the actual selling price of a further discount of 20% ove following items. ng pans of marked price 1000 h A suit of marked price % 2500 a Aset of fryi a ¢ Anelectric iron of marked price % 1250 dA table cloth of marked price % 375 New Enjoying Mathematicsine sume Sho (8 in Question gy 1 eles hose Selling price {yavhet was sold at 1449 {antsie SYSTEM WAS SOME aE 7999, 1 marks his goods 209, fis 550. What is the ga {alee marks his goods 40% in percentage? He ved AY TAX | now and then, you find advert pets and on tele isements in requesting peo, wir taxes on time. This isto help thee vont 10 build better infrastructure (facilities Js. railways. ittigation facility, water power production, te.) so thatthe nation nich forward towards a better tomorrow. cinment needs money for all these and for sing education, health facilities and also to ris various departments. The government has to fs inaveial resources (money) for paying salaries jp vemnient servants, to pay for democratic epvowniatives. Such as ministers, parliamentarians, {urs of assembly, and so on. All the necessary noe) needed by the government has to come from fie ivens, This money is collected from them in ts ior of taxes. Direct and Indirect Taxes ww are. in general, two types of taxes. They are ivand indirect tax. «ct tax is collected in the form of income tax, Mel tay, professional tax, etc. The indirect tax is ed in the form of excise tax, sales tax, value iN. service tax, ete. ee are other forms of taxes like professional wealth tax, house tax, stamp duty for sale of ey, and so on, come Tay *'sthe most important source of income for - “S0emment. Every citizen who is earning Mo “minimum stipulated income annually has ™ this tax. There are specific rules laid out by ). under th er the same cay ven below. “™Mlitions of discount, find the marked price of | pair of jeans was sold at @ 1080 A colour television set was sold at & 10,080. He then setts them at a discount of 20%. Ifthe cost OF loss percentage? He sells them at a iscount of 20%, What is his the government for tax payment. It is important for every one of us to be aware of it and pay the required tax on time. Excise Tax This isthe tax levied on some items which are ‘manufactured in the country. The tax level depends ¥upon the type of product that is manufactured. For ‘example, the excise tax for items like cigarette, alcohol, ec. is very high compared to the products of daily necessity for the common man. This tax is collected by the central government. Service Tax When you get your telephone bill, you will find in ita column marked service tax which is around 5% of the bill. This tax is charged over and above the actual cost of telephone usage. Service tax is charged in hotel bills, for services of chartered accountants, consulting firms, et. Sales Tax and Value Added Tax (VAT) Sales tax or value added tax is the tax that is collected by the state governments on the commodities sold. The rate of this tax depends upon the item sold. For luxury items, itis more and for items of common use, it is less. It actually ranges between 4% and 12.50% of the bill amount. (On most of the items, the rate is in the range from 8% t0 10%. Today in our country there are two types of sales tax charged by government when we buy or sell something. For example, if you buy a radio for ® 750, which is the selling price of the item, you pay a percentage of tax on it, This tax rate is fixed by the state, depending upon the item we are buying. This tax 4DVLN3DH3d 40 SNOILYIIIdd¥COMMERCIAL MATHEMATICS is entered in the bil ill as sales mw Fesemble the bill given belowsy ne Ct Sil Rajan Stores Rohini Bit No. ooa4s ae = we Item Quantity Rate Amount Radio 1 750% 750.00 ST. 5% .€ 9750) Total & 787.50 Di oa fe the ten = Pena Years, many of the states, at anew sperm! the central goverment, have started The sal “alled Value Added Tax (VAT). Sales tax is already added to the value of the Product and then selling price is marked on the Product including its tax. The value of the product is added to the sales tax and this tax added to the value of the product is called value added tax. This means that the price we pay and the bill amount will already have the tax included. So, there will be no entry for sales tax in the bill as it is already a Part of the selling price. £xample 22: Arjun bought a music system marked at % 9600. He paid a sales tax of 5% for the same. Whaat is the sales tax and how much is his actual cost price for the system? Solution: The value of the system = % 9600 The sales tax rate = 5% 5% of % 9600 = 9600 x too 7 © 480 9600 + % 480 10080 Example 23: Leena bought a suitcase for 7 2520 including VAT. The VAT for this item is 5%. What was the price of the suitcase before VAT was added? Also state how much is the VAT. Bill amount or cost for Arjun Solutions The cost price paid by Leena = % 2520 Ifthe original value was € 100, Leena spends & 105 For every & 105 Leena spends, the original cost =7 100 New Enjoying Mathematics 8 for ¥ 2520 which Leena spends, 100 x 2520 al cost = 795 = £2520 ~% 2400 =% 120 | Example 24: Rekha buys a cooker marked at & 6500, She gets # discount of 8%. If the sales tax IS 8%, find the amount she pays for the So. fi 2400 the or The tax cooker. n. Marked price = % 6500 1% of marked prick = 2520 Selling price = Marked price ~ Discount = 6500 — 520 = & 5980 Discount 0% of Selling price = = x 5980 % 478.40 ‘Therefore, Rekha pays % 5980 + % 478.40 =F 6458.40 Sales tax = 1 The price of a washing machine inclusive of vary, % 15,000. IF the rate of VAT is 12%, find its base price 2 The cost of a refrigerator was % 35,000. The sales tax charged was 5%. Find the total Seed |e There are two types of taxes [+ Direcetax © Indirect tax * Income Tax, Wealth Tax, and Professional Tax” examples of Direct Tax * Excise Tax, Sales Tax, and Service Tax are examp® of Indirect Tax * Income Taxis the most important source of income for the government. * Different rates of tax are applicable to individ | with different levels of income. |oo sy bought a computer for & 38.999 sis ofr these items fing te oe 4 printer for & 8000, If the rate of sasynthesizer for 8 17.289 will be getting after deposit stay on a refi : : ee veal 'S 90, Sales tax is 1170, Find the actual sale price. i isa of 10% on Ee the suit he bought. The marked price was € 5000 for the suit. If he had pay sales ta 0 Ov the price at which he bought it, how much did he pay? rice including VAT on a cooki sing range? The VAT is 6% ‘ing range is ® 19,610, What is the original price of the soup manufacturer is capable of sellin, Sill. he Will make a profit of 20% '£ Soaps at ¥ 6.36 per piece after adding the VAT at the rate of On the sale. What is his manufacturing cost per soap? OSes 2 ‘ought a dining table for € 23,850. This includes 6% sales tax. The shopkeeper has made a profit ‘on his investment. Ifthe shopkeeper has spent ® 1000 on polishing and transportation, what is the cost ofthe table? 29 bought a plot of land for € 2,35,000. He built a boundary wall around the plot and levelled the land sold it for € 35,00,000, thus making a profit of 40% on his investment. How much did he spend as vad charges? sive season, areal sels readymade ths ata of 20% and stil guns 20% of cos pe, the i “As price fora pair of ean is @ 4200, find the real’ « asta 3 what number is 40? 2 4500is 1% of what number? 3.250% oF what numbers 10? what number is 15? 5 30 is 20% of whar number? 6 100% of what number is 4237 " 8 901s 15% of what number? what number is 667 FDVLNIDUId 40 SNOLLVIIIdd¥8 gS = = a = = = Ss = co ao gS = = So Vv = oe s the 3 The cost price of 10 pencils is the selling price of 8 pencils. What is aa * A.man bought notebooks atthe rate of 72 per dozen and sold them a 5 Aman selisa si ap ~ ChaptelDneck-UP wy > Find the loss percentage. 1 Find the profit percentage (= a ie a cP. SP Profit. Profit % @ 468% 520°" 2. E6800 2476 ; % 437 % 23 £8064 ¢ 864 36208 %192 £ %8250 %750 : profit percentage? we rate OF F 25 For a pack ofS books. What was his a » What was his gain or loss galls ‘ofa for & 3210 making a profit of 7%. What would have been his profit per cent ify, had sold it for % 33602 © The marked price of a television is 25% more than the cost price. Its sold at a discount of 10%, j the marked price is € 12,000, then find the cost price. selling price, and the profit. What will be the Percentage of profit? 7 Ina village in Maharashtra, due to drought, the population decreased by 12%, since families moveg 8 A plot of land costs & 1,00,000. The land value appreciates by 5% the first year and the value furth 9 Amulya bought a second-hand car for & 5,20,350. He polished the car for € 2500, replaced old pars 10 12 13 Out of the village to find livelihood, If there were only 1584 people left in the village after the yea, how many people inhabited the village before the drought? Note: Every year many parts of India face drought situations which force them to look for livelihood elsewher. ‘What do you thnk about this issue? What percentage ofthe population migrates due to drought? ! appreciates by 8% the next year. What is the cost of the land after two years? for % 15,000, and then resold the car. He managed to make a profit of 14%. How much did he sell the car for? A businessman buys 200 litres of vegetable oil at the rate of € 60 per litre. He spends & 2000 on packaging and € 6000 on transport. He then sells I-litre packets for € 120. Does he make a profit? What is the profit or loss percentage? Find the unknown in each of the following a MP = 1780, Discount = 15%, SP = b SP =2 1422, Discount = 10%, MP =? © MP=¥ 625, SP =% 525, Discount =? | Rashmi buys some winter clothes from the Winter Wear Shop at a discount of 20%, If the marked Price for a pair of gloves is & 186, a jacket is & 839, and a sweater is € 345, how much did she pay’ all after discount? Afzal buys a television set whose marked price was @ 45,000. He then gets a discount of 15% and pays a sales tax of 12%. How much does he pay for the television set? Por el eg — country oe aa ae en administers public finances and issues legal tender currency. One of the first such banks to be instituted was the Beck cr cagead. In racorn ic racaived! HM Interest and the righ au rites nguiat the scrrty fhe ea in eae, sho Reserve Bank of India issues legal tender notes.