Question:
A colour TV is available for Rs 13440 inclusive of VAT. If the original cost of TV is Rs 12000, find the rate of VAT.
Solution:
Cost price of the TV including VAT $=$ Rs. 13440
Let the rate of VAT be $x \%$.
Cost of the TV $=x \%$ of $12000+12000$
$13440-12000=120 x$
$120 x=1440$
$x=\frac{1440}{120}$
$=12$
Thus, the rate of VAT on the colour $T V$ is $12 \%$.