The price of a stereo system with 8% GST is $5940.
- How much does Adam have to pay if the GST is increased to 14%?
- How much more must Adam pay because of the GST increase?
(a)
Price of the stereo system with 8% GST
= 100% + 8%
= 108%
108% → $5940
1% → 5940 ÷ 108 = $55
100% → 100 x 55 = $5500
Price of the stereo system with 14% GST
= 100% + 14%
= 114%
Amount that Adam has to pay
= 114% x 5500
=
114100 x 5500
= $6270
(b)
Amount more that Adam must pay because of the GST increase
= 6270 - 5940
= $330
Answer(s): (a) $6270; (b) $330