Question:
Reena goes to a shop to buy a radio, costing Rs 2568. The rate of VAT is 7%. She tells the shopkeeper to reduce the price of the radio such that she has to pay Rs 2568, inclusive of VAT. Find the reduction needed in the price of radio.
Solution:
Let the reduced price, excluding VAT, of the radio be Rs $x$.
Then,
VAT $=7 \%$ of Rs. $x=$ Rs. $\frac{7 x}{100}$
So, SP of the radio $=$ Rs. $\left(x+\frac{7 x}{100}\right)=$ Rs. $\frac{107 x}{100}$
But, $\mathrm{SP}=$ Rs. 2568
So, $\frac{107 x}{100}=2568$
$x=$ Rs. 2400
Hence, the reduction needed in the price of the radio $=$ Rs. $(2568-2400)=$ Rs. 168 .
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