Tax
A tax is a compulsory financial charge or other type of levy imposed upon a tax payer by a governmental organization in order to find government spending and various public expenditures. (Definition source: Wikipedia)
Basically, tax is the percentage amount of money that is charged by the government on the people's income or corporate's income, or other various services.
Some types of tax are: income tax, services tax, estate taxes, property tax and others.
Value Added Tax
V.A.T. is the additional percentage levied on a good's selling price, as sales tax.
Value Added Tax (V.A.T.) is always levied on the selling price of the goods or services. It differs from country to country and time to time. It may not be applicable to some good and services like: postal services, medical care, insurance, land services, etc.
Important Formulae for VAT
$\text{VAT Amount} = \text{VAT % of SP}$
$\text{SP with VAT} = \text{SP + VAT amount}$
$\text{SP without VAT} = \dfrac{\text{SP with VAT}}{\text{(100 + VAT%)}}$
Marked Price, Discount and VAT
The tagged price of an article is called Marked Price. It is pre-written or already printed on the article. It is abbreviated as M.P.
The amount of money deducted from the Marked Price of an article by the seller is called discount. This changes the selling price of any article.
Important Formulae
$\text{Discount amount} = \text{Discount % of MP}$
$\text{Selling Price} = \text{Marked Price - Discount amount}$
$\text{Discount Percent} = \dfrac{\text{Discount amount}}{\text{MP}} \times \text{100%}$
Money Exchange (Currency Exchange)
Currency exchange is the legal process of exchanging the currency of one country with another for the customer.
There are more than 200 countries in the world with their own currencies. All the countries don't accept other countries' currency. Therefore, people need to exchange their currency with the others' to make trade easy and comfortable. This is done over a counter at a teller station.
The buying and selling rates of each countries' currency may remain stable while not, as well. Most of the world's currencies, including the euro (Eur), the US dollar (USD), the Canadian Dollar (CAD), the Australian dollar (AUD), and the British Pound (GBP) constantly change their rate of buying or selling.
To solve questions related to this topic, the exchange rate will be given in the question. Therefore, we have not put the table of exchange rates here.
Solved Examples
Example 1: If Dollar 5= £4 and Rs 342 = Dollar 3, how many pounds (£) will be equal to Rs 8550?
Solution:
Given,
Dollar 5= £4S
o, Dollar 1 = £4/5 .... (i)
Also,
Rs 342 = Dollar 3
or, Dollar 1 = Rs 342/3 ..... (ii)
From (i) and (ii), we get;
£ 4/5 = Rs 342 /3
or, £ 12 = Rs 1710
or, Re 1 = £12/ 1710
So, Re 1 x 8550 = £12/1710 x 8550
Therefore, Rs 8550 = £ 60
Example 2: A trader bought some electric blenders for Rs 4,000 per piece. He sold each blender to customers for Rs 4,332 with 14% VAT. Find his profit or loss percent.
Solution:
Given,
Let the number of blenders bought by the trader be x.
He bought 'x' electric blenders for Rs 4,000 per piece. So, CP = Rs 4000x
He sold each blender for Rs 4,332 each with 14% VAT.
So, SP with VAT = Rs 4332
or, SP + 14% of SP = Rs 4332
or, SP + 14/100 SP = Rs 4332
or, (100+14)SP/100 = Rs 4332
or, 114SP /100 = Rs 4332
or, SP = Rs 4322×100/114
So, SP = Rs 3800
Since, each blender is sold for Rs 3,800. Total SP becomes Rs 3800x
Here, CP>SP
So, Loos percent = (CP - SP)/CP × 100%
= (4000x - 3800x)/4000x × 100%
= 200x / 4000x × 100%
= 5%
Therefore, the required loss percentage in the above trade is 5%.
Example 3: The marked price of a calculator is Rs 1,800. The shopkeeper allows 10% discount and still makes 8% profit. At what price did the shopkeeper purchase the calculator?
Solution:
Given,
Marked price of a calculator (MP) = Rs 1,800
Discount percentage allowed (d) = 10%
Profit percentage (P) = 8%
To find: CP = ?
We know,
Selling Price (SP) = MP - d/100×MP
= 1800 - 10/100×1809
= 1800 - 180
= Rs 1620
And,
Cost Price (CP) = (100×SP)/(100+P%)
= (100×1620)/(100+8)
= 162000/108
= Rs 1500
Therefore, the required cost price of the calculator is Rs 1500.
Example 4: The salary of a secondary teacher in the USA is Dollar 25 get hour. If a full time teacher has to teach 160 hours in a month. Then, find the yearly salary of the teacher in Nepali Rupees (NRs) when Dollar 1 = NRs 105.50.
Solution:
Given,
In the USA,
The salary of a secondary teacher per hour = Dollar 25
Total hours to be taught in a month = 160 hours
Since there are 12 months in a year, total hours taught in a year = 160 hours × 12 = 1920 hours
The salary of the full time teacher in a year = 1920 × Dollar 25 = Dollar 48000
We know,
Dollar 1 = NRs 105.50
So, Salary of the teacher in Nepali Rupees (NRs) = 48000 × NRs 105.50
= NRs 5064000
Therefore, the required salary of the teacher in Nepali Rupees is 50,64,000.
Example 5: If NRs 200 = 2.45 AUD (Australian Dollar) and 8116 AUD = 8152 CAD (Canadian Dollars). How much CAD can be exchanged with NRs 4,05,800?
Solution:
Given,
Exchange Rates of some currencies are:
NRs 200 = 2.45 AUD
8116 AUD = 8152 CAD
Taking NRs 200 = 2.45 AUD
or, 2.45 AUD = NRs 200
or, 1 AUD = NRs 200/2.45 - (i)
Taking 8116 AUD = 8152 CAD
or, 8116 AUD = 8152 CAD
or, 1 AUD = 8152/8116 CAD - (ii)
From equations (i) and (ii), we get,
NRs 200/2.45 = 8152/8116 CAD
or, NRe 1 = 8152/8116 × 2.45/200 CAD
or, NRe 1 = 0.0123 CAD
or, NRe 1 × 405800 = 0.0123 × 405800 CAD
So, NRs 405800 = 4991.34 CAD
Therefore, 4,991.34 CAD can be exchanged with NRs 4,05,800.