The price of a massage chair with 12% GST is $896.
- How much does Adam have to pay if the GST is decreased to 5%?
- How much saving does Adam enjoy as a result of the decrease in GST?
(a)
Price of the massage chair with 12% GST
= 100% + 12%
= 112%
112% → $896
1% → 896 ÷ 112 = $8
100% → 100 x 8 = $800
Price of the massage chair with 5% GST
= 100% + 5%
= 105%
Amount that Adam has to pay
= 105% x 800
=
105100 x 800
= $840
(b)
Saving that Adam enjoys
= 896 - 840
= $56
Answer(s): (a) $840; (b) $56