The price of a hi-fi system with 10% GST is $440.
- How much does Adam have to pay if the GST is decreased to 4%?
- How much saving does Adam enjoy as a result of the decrease in GST?
(a)
Price of the hi-fi system with 10% GST
= 100% + 10%
= 110%
110% → $440
1% → 440 ÷ 110 = $4
100% → 100 x 4 = $400
Price of the hi-fi system with 4% GST
= 100% + 4%
= 104%
Amount that Adam has to pay
= 104% x 400
=
104100 x 400
= $416
(b)
Saving that Adam enjoys
= 440 - 416
= $24
Answer(s): (a) $416; (b) $24