Question

A shopkeeper buys an article whose list price is ₹ 800 at some rate of discount from a wholesaler. He sells the article to a consumer at the list price and charges sales tax at the prescribed rate of 7.5%. If the shopkeeper has to pay a VAT of ₹ 6, find the rate of discount at which he bought the article from the wholesaler.

Answer 1

List price (MP) of an article = ₹ 800
S.P. of the shopkeeper = ₹ 800
Rate of VAT = 7.5%
Total VAT

= ₹ `(800 xx 7.5)/(100)` 
= ₹ 60
VAT paid by the shopkeeper = ₹ 6
VAT paid by the wholeseller
= ₹ 60 – ₹ 6
= ₹ 54
Rate of VAT = 7.5%
S.P. of wholeseller

= `(54 xx 100)/(7.5)`

= `(54 xx 10 xx 100)/(75)`
= ₹720
Total discount
= ₹800 - ₹720
= ₹80
Rate of discount
= `(80 xx 100)/(800)` 
= 10%.