Question

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

1. The rate of sales tax.
2. 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

(1) ∴ `"Rate of sales tax" = "sales tax"/"list price" xx 100%`

= `64/1600 xx 100%`

= 4%

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

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

= `"Rs." 1600 + 10/100 xx 1600`

= Rs. 1600 + Rs. 160

= Rs. 1760