The price of a stereo system with 6% GST is $424.
- How much does Adam have to pay if the GST is decreased to 2%?
- How much saving does Adam enjoy as a result of the decrease in GST?
(a)
Price of the stereo system with 6% GST
= 100% + 6%
= 106%
106% → $424
1% → 424 ÷ 106 = $4
100% → 100 x 4 = $400
Price of the stereo system with 2% GST
= 100% + 2%
= 102%
Amount that Adam has to pay
= 102% x 400
=
102100 x 400
= $408
(b)
Saving that Adam enjoys
= 424 - 408
= $16
Answer(s): (a) $408; (b) $16