A retailer purchased an electric bicycle for Rs 35,000 and sold at a profit of 16% to a customer. How much did the customer pay for it with 13% VAT?

Answer: Rs 45878

Solution:

Given,

Cost Price (CP) = Rs 35000

Profit Percentage (P) = 16%

VAT Percentage (VAT) = 13%

To find: SP with VAT = ?

Let us represent Selling Price with SP then,

We know,

$SP = CP (1 + \frac{P}{100})$

Also,

$SP with VAT = SP (1 + \frac{VAT}{100} )$

From above two formulae, we have,

$SP with VAT = CP (1 + \frac{P}{100} )( 1 + \frac{VAT}{100} )$

$= CP ( 1 + \frac{16}{100}) ( 1+ \frac{13}{100} )$

$= CP × \dfrac{116}{100} × \dfrac{113}{100}$

$= 35000 × \dfrac{116 × 113}{100 × 100}$

$= Rs 45878$

Hence, the customer paid Rs 45878 for the electric bicycle with 13% VAT.

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