A trader marks the price of his/her goods 40% above the cost price and allows 20% discount. If his/her purchase price of an item is Rs 6,000, how much should a customer pay for it levying 13% VAT?

Solution:

Given,

Cost price (CP) = Rs 6000

Marked Price (MP) = $CP(1 + 40%)$

$= CP ( 1 + \frac{40}{100})$

$= 6000 × \frac{140}{100}$

$= Rs 8400$

Discount percentage (d%) = 20%

Now,

Selling Price (SP) = $MP ( 1 - \frac{d%}{100})$

$= MP ( 1 - \frac{20}{100})$

$= 8400 × \frac{80}{100}$

$= Rs 6720$

And,

VAT percentage (VAT%) = 13%

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

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

$= 6720 × \frac{113}{100}$

$= Rs 7593.60$

Hence, a customer should pay Rs 7593.60 with 13% VAT.

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