Math
1. The manager of a bottle shop makes 25% profit on the cost price of all bottles of wine sold in the shop. She charges $12 for a bottle of Open View reisling. A hotel room service charged $30 for a similar bottle of Open View reisling.
a) How much profit does the hotel room service make from selling 1 bottle of Open View reisling?
b) What percentage profit on their cost price does the hotel room service make?
2. All goods for sale in England are subject to a 17.5% value added tax(VAT) . Julian bought two pairs of pants for £188, which included VAT. How much of the pants was the VAT?
Why is 14.89% of the price of goood in the UK give the value of the 17.5% VAT in the price?
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Answers
a) The hotel room service makes a profit of $18, which is a 60% profit on the cost price. b) The hotel room service makes a 60% profit on the cost price. 2. The VAT on the pants was £32.80 (17.5% of £188). The 14.89% of the price of goods in the UK given the value of the 17.5% VAT in the price is because VAT is applied on the sum of both the cost price of the goods and the VAT itself (i.e. the Value Added Tax is added to the cost price of the goods). This means that when VAT is added the cost price is increased by the amount of the VAT. This results in the total cost increase of the goods being 17.5% more than it was before VAT was added.
