Kavitha goes to purchase a bike which is priced at Rs.35,640 including 10% sales tax. However the actual rate of sales tax at the time of purchase is 7%. Find the extra profit made by the shopkeeper if he still charges the original listed price.
Asked by Topperlearning User | 4th Jun, 2014, 01:23: PM
Expert Answer:
When sales tax is charged at 10%, for a basic price of Rs.100 the price including sales tax becomes:
Rs 100 + Rs 10 = Rs 110
Thus for Rs 110 price + sales tax, the basic price is Rs. 100.
Therefore, for Rs 35640 price + sales tax, the basic price is
= 
For Rs. 100 basic price, the price plus 7% sales tax is Rs. 107
Therefore, for Rs. 32400 basic price, the price plus 7% sales tax is
= 
Extra Profit made = Original list price - price with 7% sales tax
= Rs (35640 - 34668) = Rs. 972
Answered by | 4th Jun, 2014, 03:23: PM
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