Shop A is more expensive by 1.8 % percentage .
- The price displayed on the product label is called the display price or list price. This is the price at which the product will be sold.
- If discount is offered, M.P. > SP
- If no discount is offered, M.P. < SP.
- Discounting is the process of determining the present value of future payments or cash flows to be received.
- Value Added Tax (VAT) is a consumption tax on goods and services that add value at every stage of the supply chain, from initial production to the point of sale.
- The amount of VAT paid by the user is based on the cost of the product minus the material costs of the product already taxed in previous stages which is given by [tex]S.P=M.P\times\frac{100-D}{100}[/tex] ....(1)
It is given that shop A has Marked price =Rs 25,000, Discount=10%, Putting above values in equation (1) we get
[tex]S.P=25000\times\frac{100-10}{100} \\\\S.P=25000\times\frac{90}{100} \\\\\S.P=22500[/tex]
Rate of VAT 13% is given by
[tex]=\frac{13}{100} \times 22500\\\\=2925[/tex]
The amount to be payed for buying mobile set is [tex]=22500+2925=25425[/tex]
It is given that shop B has Marked price =Rs 24,000, Discount=8%, Putting above values in equation (1) we get
[tex]S.P=24000\times\frac{100-8}{100} \\\\S.P=24000 \times\frac{92}{100} \\\\S.P=22080[/tex]
Rate of VAT 13% [tex]=13\% \ 22080[/tex]
[tex]=\frac{13}{100} \times 22080\\\\=2870.4[/tex]
The amount to be payed for buying mobile set is[tex]=22080+2870.4=24950.4[/tex]
As the amount of shop A is more than shop B so , shop A is more expensive
Percentage [tex]= \frac{25425-24950.4}{25425}\times100[/tex]
[tex]= \frac{474.6}{25425}\times100\\\\=0.01866\times100\\\\=1.8\%[/tex]
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