How Much of a Total Price Is the Tax?Date: 10/20/2003 at 08:01:59 From: Tracey Subject: working out the vat content of an amount How do you work out the VAT content of an amount? Eg: £55? Date: 10/22/2003 at 09:17:02 From: Doctor Peterson Subject: Re: working out the vat content of an amount Hi, Tracey. You're asking about the Value Added Tax, I believe; we handle taxes differently in America, showing the actual price in a store and adding the tax to that when it is bought. To find the VAT when you know only the final amount you paid, you need a little algebra. You don't know the actual price of what you bought, so call it X. You do know the tax rate (but I don't!); I'll call it r. (For example, if the tax rate is 15%, then r=0.15.) Then the amount you pay is X + rX = (1+r)X If you know you paid Y, then you have to solve the equation Y = (1+r)X for X, which you do by dividing by 1+r: Y X = ------- (1 + r) Finally, since you want not the original price, but the amount of tax you paid, you have to multiply this by r: r tax = rX = ------- * Y (1 + r) So, for example, if the tax rate is 15%, you find the tax by multiplying the total price by (0.15)/(1.15) = 0.1304 If you have any further questions, feel free to write back. - Doctor Peterson, The Math Forum http://mathforum.org/dr.math/ |
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