Unit 2 Tax and Money Exchange

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Unit 2 Tax and Money Exchange

Discount is given on the marked price. That is Discount depends


on the marked price.
1. Discount = M.P. - S.P.
𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕
2. Discount % = × 𝟏𝟎𝟎%
𝑴.𝑷.

VAT is calculated on the selling price. That is VAT depends on the


selling price.
3. VAT amount = S.P. with VAT – S.P.
𝑽𝑨𝑻
4. VAT % = × 𝟏𝟎𝟎%
𝑺.𝑷.

Exercise: 2.1
2. Calculate the price with VAT of the following cases:
e) M.P. = Rs.4,00,000, Profit = Rs.20,000, Discount = 10%, VAT =
13%
M.P
Solution:
- Discount
M.P. = Rs.400000 + Commission
S.P= M.P.- discount% of M.P.
Profit = Rs.20000
+ VAT
Discount = 10%
S.P. with VAT=S.P.+VAT% of S.P.
VAT = 13%
Price with VAT = ?

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Now, Discount amount = discount % of M.P.
= 10% of 400000
𝟏𝟎
= ×400000
𝟏𝟎𝟎 M.P

= Rs. 40000 - Discount

+ Commission
S.P. = M.P. – Discount S.P= M.P.- discount% of M.P.

= 400000 – 40000 + VAT

= Rs. 396000 S.P. with VAT=S.P.+VAT% of S.P.

VAT amount = VAT% of S.P.


𝟏𝟑
= × 𝟑𝟗𝟔𝟎𝟎𝟎
𝟏𝟎𝟎

= Rs.51480
S.P. with VAT = S.P. + VAT
= 396000 +51480
= Rs. 447480. Ans.
3. Calculate the Marked price of each of the following:
a) Solution:
Discount = 15%
VAT = 13%
Paid amount =Rs. 5763
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M.P. =?
Let the M.P. be Rs.x
S.P. = M.P. – discount% of M.P
𝟏𝟓
= x - ×𝒙
𝟏𝟎𝟎

= x – 0.15x
= 0.85x
SP with VAT = SP + VAT% of SP
𝟏𝟑
Or, 5763 = 0.85x + ×0.85x
𝟏𝟎𝟎

Or, 5763 = 0.85x + 𝟎. 𝟏𝟏𝟎𝟓𝒙


Or, 5763 = 0.9605x
𝟓𝟕𝟔𝟑
Or,𝒙 = = 𝟔𝟎𝟎𝟎
𝟎.𝟗𝟔𝟎𝟓

Hence MP = Rs 6000 Ans.


4.a) The marked price of a mobile set is Rs 6000. What will be
the price of that mobile set if 13% VAT is levied after
allowing 5% discount? Find it.

5.b) An electric equipment is sold at Rs 111870 after allowing


10% discount and 13% VAT. Find VAT and discount amount.

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6.b) 13% VAT is levied on a handicraft after 10% discount. If the
VAT amount is Rs. 910, then find the marked price and
selling price of it with VAT.
Solution:
VAT% = 13%
Discount % = 10%
VAT amount = Rs. 910
M.P. = ?
S.P. with VAT = ?
Let the M.P. be Rs. x
Discount amount = 10% of M.P. = 10/100x = 0.1x
S.P. = M.P. - Discount amount = x – 0.1x = 0.9x
VAT amount = 13% of S.P.
𝟏𝟑
𝑶𝒓, 𝟗𝟏𝟎 = × 𝟎. 𝟗𝒙
𝟏𝟎𝟎
𝟗𝟏𝟎𝟎𝟎
𝑶𝒓, 𝒙 = = 𝑹𝒔. 𝟕𝟕𝟕𝟕. 𝟕𝟖
𝟏𝟑 × 𝟎. 𝟗
𝑴. 𝑷. = 𝑹𝒔. 𝟕𝟕𝟕𝟕. 𝟕𝟖
S.P. with VAT = SP + VAT
= 0.9x + 910
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= 0.9 X 𝟕𝟕𝟕𝟕. 𝟕𝟖 + 910
= Rs. 7910
7.b) A dealer of electric oven sold an induction heater costing Rs.
4200 with 13% VAT to a retailer. The retailer added
transportation cost of Rs. 250, profit 15% and local tax Rs
150 and sold to a consumer. How much amount will be paid
for that heater if he/she has to pay 13% VAT.
Solution:
M.P. = Rs. 4200
VAT =13%
For Retailer:
C.P. = M.P. + 13% of M.P.
= 4200 + 13/100 X 4200
= 4200 + 546
= Rs.4746
Profit = 15% of C.P. = 15/100 X 4746 = Rs.711.90
Transportation cost = Rs. 250
Local tax = Rs 150
Total S.P. = 4746 + 711.90 + 250 + 150 = Rs. 5857.90
For consumer:
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Total C.P. = Rs. 5857.90
VAT% = 13%
Total amount to be paid = 5857.9 + 13% of 5857.90
= 5857.90 + 761.53
= Rs. 6619.43 Ans.

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Unit 2 Tax and Money Exchange
Money Exchange:
Foreign Exchange Rates
Home » Foreign Exchange Rate
Showing Exchange Rate for December 13, 2020
Select Date:
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Exchange Rates Fixed by Nepal Rastra Bank
Currency Unit Buy Sell
INR (Indian Rupee) 100 160.00 160.15
Open Market Exchange Rates
(For the purpose of Nepal Rastra Bank)
Currency Unit Buy Sell
USD (U.S. Dollar) 1 117.55 118.15
EUR (European Euro) 1 142.62 143.35
GBP (UK Pound Sterling) 1 155.42 156.22
CHF (Swiss Franc) 1 132.30 132.98
AUD (Australian Dollar) 1 88.62 89.07
CAD (Canadian Dollar) 1 92.15 92.62
SGD (Singapore Dollar) 1 87.98 88.43
JPY (Japanese Yen) 10 11.30 11.36
CNY (Chinese Yuan) 1 17.97 18.06
SAR (Saudi Arabian Riyal) 1 31.34 31.50
QAR (Qatari Riyal) 1 32.28 32.44
THB (Thai Baht) 1 3.91 3.93
AED (UAE Dirham) 1 32.00 32.17
MYR (Malaysian Ringgit) 1 29.01 29.16
KRW (South Korean Won) 100 10.77 10.82
SEK (Swedish Kroner) 1 13.90 13.97
DKK (Danish Kroner) 1 19.16 19.26
HKD (Hong Kong Dollar) 1 15.16 15.24
KWD (Kuwaity Dinar) 1 385.14 387.11
BHD (Bahrain Dinar) 1 311.73 313.32

Note: Under the present system the open market exchange rates quoted by different banks may differ

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Exercise 2.2
1. Convert the following in to Nepalese currency(use buying rate)
(c) South Korean Won 9,75,000.
Solution,
The buying rate of South Korean Won from the table is
100 Won = Rs. 9.38
𝐑𝐬.𝟗.𝟑𝟖
Or, 𝟏 𝐖𝐨𝐧 = 𝟏𝟎𝟎
𝐑𝐬.𝟗.𝟑𝟖
∴ 𝟗, 𝟕𝟓, 𝟎𝟎𝟎 𝐖𝐨𝐧 = × 𝟗, 𝟕𝟓, 𝟎𝟎𝟎
𝟏𝟎𝟎

= 𝐑𝐬. 𝟗. 𝟑𝟖 × 𝟗, 𝟕𝟓𝟎
= 𝐑𝐬. 𝟗𝟏, 𝟒𝟓𝟓. Ans.

2(c) What will be per week income of Parbati in NC if she earns


15 Australian Dollars per hour and works 8 hours per day for
5 days? Find it.
Solution:
Income per hour = 15 Australian Dollars.
Income per day = 𝟏𝟓 × 𝟖 Australian Dollars.
Income of 5 day = 𝟏𝟓 × 𝟖 × 𝟓 Australian Dollars.
= 𝟔𝟎𝟎 Australian Dollars.

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Here we have to use buying rare as Parbati has to sell.
1 Australian Dollar = Rs.82.37
∴ 𝟔𝟎𝟎 𝐀𝐮𝐬𝐭𝐫𝐚𝐥𝐢𝐚𝐧 𝐃𝐨𝐥𝐥𝐚𝐫 = 𝐑𝐬. 𝟖𝟐. 𝟑𝟕 × 𝟔𝟎𝟎

= 𝐑𝐬. 𝟒𝟗, 𝟒𝟐𝟐


∴ 𝑷𝒂𝒓𝒃𝒂𝒕𝒊 𝒆𝒂𝒓𝒏𝒔 𝑹𝒔. 𝟒𝟗, 𝟒𝟐𝟐 𝒊𝒏 𝟓 𝒅𝒂𝒚𝒔. Ans.

3(b) How much Euro should a student of University of England


pay for exam fee if he/she will pay Rs. 9659.40 from Nepal?
Find it.
Solution:
Paid money from Nepal = Rs. 9659.40
The student has to pay in Euro, so we have to use selling rate.
1 Euro = Rs 114.27
Rs. 9659.40 = 𝑥 Euro (say)
By chain rule,
1 × 9659.40 = 114.27 × 𝑥
9659.40
Or, =𝑥
114.27

Or, 𝑥 = 84.53 𝐸𝑢𝑟𝑜.


∴ 𝑻𝒉𝒆 𝒔𝒕𝒖𝒅𝒆𝒏𝒕 𝒉𝒂𝒔 𝒕𝒐 𝒑𝒂𝒚 𝟖𝟒. 𝟓𝟑 𝑬𝒖𝒓𝒐 𝒊𝒏 𝒕𝒉𝒆 𝑼𝒏𝒊𝒗𝒆𝒓𝒔𝒊𝒕𝒚.
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4(a) How much American Dollar will we obtain from 100 Canadian
Dollar?
Solution:
Here, we have to sell the Canadian Dollar and buy American Dollar.
So we have to use buying rate for Canadian Dollar and selling rate for
American Dollar.
Now, 𝐥𝐞𝐭 𝟏𝟎𝟎 𝐂𝐚𝐧𝐚𝐝𝐢𝐚𝐧 𝐃𝐨𝐥𝐥𝐚𝐫 = 𝒙 𝐀𝐦𝐞𝐫𝐢𝐜𝐚𝐧 𝐃𝐨𝐥𝐥𝐚𝐫.
𝟏 𝐀𝐦𝐞𝐫𝐢𝐜𝐚𝐧 𝐃𝐨𝐥𝐥𝐚𝐫 = 𝐑𝐬. 𝟏𝟎𝟕. 𝟒𝟎
𝐑𝐬. 𝟖𝟏. 𝟗𝟒 = 𝟏 𝐂𝐚𝐧𝐚𝐝𝐢𝐚𝐧 𝐃𝐨𝐥𝐥𝐚𝐫
By chain rule,
𝟏𝟎𝟎 × 1 × 𝟖𝟏. 𝟗𝟒 = 𝒙 × 𝟏𝟎𝟕. 𝟒𝟎 × 𝟏
𝟏𝟎𝟎×𝟖𝟏.𝟗𝟒
Or, =𝒙
𝟏𝟎𝟕.𝟒𝟎

Or, 𝒙 = 𝟕𝟔. 𝟐𝟗
∴ 𝟕𝟔. 𝟐𝟗 𝑨𝒎𝒆𝒓𝒊𝒄𝒂𝒏 𝑫𝒐𝒍𝒍𝒂𝒓𝒔 𝒘𝒊𝒍𝒍 𝒃𝒆 𝒐𝒃𝒕𝒂𝒊𝒏𝒆𝒅 𝒇𝒓𝒐𝒎
𝟏𝟎𝟎 𝐂𝐚𝐧𝐚𝐝𝐢𝐚𝐧 𝐃𝐨𝐥𝐥𝐚𝐫𝐬. Ans.
5(d) A project was contracted with total amount of Chinese Yuan 10,00,000.
After 10% devaluation of Nepali rupee, how much should the contractor
add to complete the contract?

Solution:

Contracted amount = Chinese Yuan 10,00,000

The buying rate of Chinese Yuan 1 = Rs. 15.58

∴ 𝐂𝐡𝐢𝐧𝐞𝐬𝐞 𝐘𝐮𝐚𝐧 𝟏𝟎, 𝟎𝟎, 𝟎𝟎𝟎 = 𝐑𝐬. 𝟏𝟓. 𝟓𝟖 × 𝟏𝟎, 𝟎𝟎, 𝟎𝟎𝟎
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= 𝐑𝐬. 𝟏, 𝟓𝟓, 𝟖𝟎, 𝟎𝟎𝟎
𝐀𝐟𝐭𝐞𝐫 𝟏𝟎% 𝐝𝐞𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐢𝐧 𝐍𝐞𝐩𝐚𝐥𝐢 𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲,
Chinese Yuan 1 = Rs. 15.58+10% of Rs. 15.58

= Rs. 15.58+ Rs. 1.558

= Rs. 17.138

∴ 𝐂𝐡𝐢𝐧𝐞𝐬𝐞 𝐘𝐮𝐚𝐧 𝟏𝟎, 𝟎𝟎, 𝟎𝟎𝟎 = 𝐑𝐬. 𝟏𝟕. 𝟏𝟑𝟖 × 𝟏𝟎, 𝟎𝟎, 𝟎𝟎𝟎
= 𝐑𝐬. 𝟏, 𝟕𝟏, 𝟑𝟖, 𝟎𝟎𝟎.

Hence the contractor needs to add Rs.(𝟏, 𝟕𝟏, 𝟑𝟖, 𝟎𝟎𝟎 − 𝟏, 𝟓𝟓, 𝟖𝟎, 𝟎𝟎𝟎)

= 𝑹𝒔. 𝟏𝟓, 𝟓𝟖, 𝟎𝟎𝟎 Ans.

6(a) A laptop was bought at Canadian $770. If the tax of 20% and 13%
VAT should be paid, find the least selling price of it in Nepali rupee
that prevents the shopkeeper from loss.
Solution:

C. P. of laptop = Canadian $ 770.


𝟐𝟎
Tax = 20% of C. P. = × $ 𝟕𝟕𝟎 = 𝟐 × $ 𝟕𝟕 = $ 154.
𝟏𝟎𝟎

C. P. with tax = C. P. + Tax = $ 770 + $ 154 = $ 924.


𝟏𝟑
VAT amount = 13% of $ 924 = × $ 𝟗𝟐𝟒 = $120.12
𝟏𝟎𝟎

C. P. with tax and VAT = $ 924 + $120.12 = $ 1044.12

Now, selling rate of Canadian $1 = Rs. 82.40

∴ 𝐂𝐚𝐧𝐚𝐝𝐢𝐚𝐧 $ 𝟏𝟎𝟒𝟒. 𝟏𝟐 = 𝐑𝐬. 𝟖𝟐. 𝟒𝟎 × 𝟏𝟎𝟒𝟒. 𝟏𝟐


= 𝐑𝐬. 𝟖𝟔𝟎𝟑𝟓. 𝟒𝟗

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Hence the least selling price of it in Nepali rupee that prevents the
shopkeeper from loss = 𝐑𝐬. 𝟖𝟔𝟎𝟑𝟓. 𝟒𝟗 Ans.
6(b) By selling an object in 17000 IC the shopkeeper gain 20% profit.
Find the selling price of that object in NRS to get 25% profit.
Solution:

S. P. = 17000 IC

Profit = 20%

∴ 𝑪. 𝑷. +𝟐𝟎% 𝒐𝒇 𝑪. 𝑷. = 𝑺. 𝑷.
𝟐𝟎𝑪.𝑷.
Or, 𝑪. 𝑷. + = 𝟏𝟕𝟎𝟎𝟎
𝟏𝟎𝟎
𝟏𝟐𝟎𝑪.𝑷.
Or, = 𝟏𝟕𝟎𝟎𝟎
𝟏𝟎𝟎
𝟏𝟕𝟎𝟎𝟎×𝟏𝟎𝟎
Or, 𝑪. 𝑷. =
𝟏𝟐𝟎

Or, 𝑪. 𝑷. = 𝟏𝟒𝟏𝟔𝟔. 𝟔𝟕 𝐈𝐂

Now to get 25% profit,

New S. P. = C.P. + 25% of C.P.

= 𝟏𝟒𝟏𝟔𝟔. 𝟔𝟕 + 25% of 𝟏𝟒𝟏𝟔𝟔. 𝟔𝟕

= 𝟏𝟒𝟏𝟔𝟔. 𝟔𝟕 + 3541.67

= 𝟏𝟕𝟕𝟎𝟖. 𝟑𝟑 I.C.

The buying rate of 100 I.C. = Rs. 160

1 I. C. = Rs. 1.60

∴ 𝟏𝟕𝟕𝟎𝟖. 𝟑𝟑 𝐈. 𝐂. = 𝟏𝟕𝟕𝟎𝟖. 𝟑𝟑 × 𝟏. 𝟔𝟎
= 𝐑𝐬. 𝟐𝟖𝟑𝟑𝟑. 𝟑𝟒

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Hence the selling price of that object in NRS to get 25% profit is 𝐑𝐬. 𝟐𝟖𝟑𝟑𝟑. 𝟑𝟒

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