Question

A bicycle is available for Rs. 1,664 including sales tax. If the list price of the bicycle is Rs. 1,600 find:

(i) the rate of sales tax.

(ii) the price, a customer will pay for the bicycle if the sales tax is increased by 6%.

Answer 1

Price of bicycle inclusive of sales tax = Rs. 1,664

List price of bicycle = Rs. 1,600

(i) Sales tax = Rs. 1,664 – Rs. 1,600 = Rs. 64

= 4% Ans.

(ii) New rate of sales tax = (4 + 6)% = 10%

New total price = Rs. 1,600 + 10% of Rs. 1,600

= Rs. 1,600 + (10/100) × 1,600

= Rs. 1,600 + Rs. 160

= Rs. 1,760 Ans.