VAT charged at 20%, so £19,800 represents 120% of price before VAT
Q. A car costs £19,800 including value-added tax (VAT). The VAT is charged at 20%, so £19,800 represents 120% of the price before VAT. What is the price before VAT?
A. 10% is: £19,800 / 12 = £1,650
100% is: £1,650 * 10 = £16,500
The price before VAT is added is £16,500.
My question: Isn't 20% off of 19800 x 0.2 = 3960?
Why did he use 10%, where did he get 12 and 10 from?
Please help. Thank you!
Q. A car costs £19,800 including value-added tax (VAT). The VAT is charged at 20%, so £19,800 represents 120% of the price before VAT. What is the price before VAT?
A. 10% is: £19,800 / 12 = £1,650
100% is: £1,650 * 10 = £16,500
The price before VAT is added is £16,500.
My question: Isn't 20% off of 19800 x 0.2 = 3960?
Why did he use 10%, where did he get 12 and 10 from?
Please help. Thank you!
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