Question:
Tick (✓) the correct answer:
The price of watch including 10% VAT is Rs 825. What is its basic price?
(a) Rs 742.52
(b) Rs 775
(c) Rs 750
(d) Rs 907.50
Solution:
(c) Rs 750
Let the basic price be $x$.
VAT $=10 \%$ of Rs $x$
$=\operatorname{Rs}\left(x \times \frac{10}{100}\right)$
$=\operatorname{Rs} \frac{x}{10}$
$\therefore$ Price including $\mathrm{VAT}=\mathrm{Rs}\left(\mathrm{x}+\frac{\mathrm{x}}{10}\right)$
$=R s . \frac{11 x}{10}$
Now, $\frac{11 \mathrm{x}}{10}=825$
$\quad \Rightarrow x=\left(825 \times \frac{10}{11}\right)$
$\quad \Rightarrow x=750$
∴ The basic price of the watch is Rs 750.