Solving Discount and VAT Calculation for a Video Player: A Step-by-Step Guide
When it comes to selling products, understanding and correctly applying discounts and value-added tax (VAT) is crucial for making accurate financial calculations. This guide will walk you through a practical example involving a video player, illustrating how to calculate the marked price of a product given a specific discount and tax scenario.
Understanding the Problem Statement
A video player was sold at a discount of 10% on its marked price. Additionally, 13% VAT was applied to the discounted price. The final amount received by the customer was Rs. 600. The goal is to determine the marked price of the video player.
Breaking Down the Calculation
To solve this problem, we will follow a step-by-step approach:
Identify the variables: Marked Price Rs. X Calculate the Discounted Price: Apply the 13% VAT to the Discounted Price: Solve for X:Step-by-Step Calculation
Let the marked price of the video player be Rs. X.
Step 1: Calculate the Discounted Price
The video player was sold at a discount of 10%. Therefore, the discounted price can be calculated as:
Discounted Price Marked Price - (Marked Price × Discount Rate)
Substituting the given values, we get:
Discounted Price X - (X × 0.10) 0.9
h3>Step 2: Apply the 13% VATAfter applying the 10% discount, 13% VAT was added to the discounted price. The total selling price with VAT can be calculated as:
Total Selling Price Discounted Price (Discounted Price × VAT Rate)
Substituting the values, we get:
Total Selling Price 0.9 (0.9 × 0.13) 0.9 0.117X 1.017X
h3>Step 3: Set Up the Equation for the Final Selling PriceThe final selling price after applying the discount and adding VAT is given to be Rs. 600. Therefore, we can set up the following equation:
1.017X 600
h3>Step 4: Solve for XTo find the marked price, we need to solve the above equation for X:
X 600 / 1.017 ≈ 589.97
Rounding off to the nearest whole number, the marked price of the video player is approximately Rs. 590.
Conclusion
In this detailed guide, we have walked through the process of calculating the marked price of a video player given a discount and VAT scenario. By following these steps, you can apply similar calculations to other products in your inventory for accurate financial reporting and sales management.