Define VAT. 2. Calculate the VAT amount on the old price of PPH (R988.00) if the VAT rate is 15%. 3…

Question

Define VAT. 2. Calculate the VAT amount on the old price of PPH (R988.00) if the VAT rate is 15%. 3. Calculate the difference between the old (R223.00) and new (R13.00) prices of the UTM.

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Here are the solutions to the questions:

2.1.1 The acronym VAT stands for Value Added Tax.

2.1.2 To calculate the amount of VAT payable on the old price for PPH:

Identify the old price of PPH and the VAT rate.
Old price of PPH (including VAT) = R988.00
VAT rate = 15%
Calculate the VAT amount.
Since the price includes 15% VAT, the R988.00 represents 115% of the price before VAT.
$\text{VAT amount} = \frac{\text{VAT rate}}{100\% + \text{VAT rate}} \times \text{Price including VAT}$ $\text{VAT amount} = \frac{15}{100 + 15} \times R988.00$ $\text{VAT amount} = \frac{15}{115} \times R988.00$ $\text{VAT amount} = R128.8695...$
Round the VAT amount to two decimal places.
$\text{VAT amount} \approx R128.87$
The amount of VAT payable on the old price for PPH is $\boxed{\text{R128.87}}$ .

2.1.3 To calculate the difference between the new price and the old price of the UTM:
Identify the old and new prices of the UTM.
Old price of UTM = R223.00
New price of UTM = R13.00
Calculate the difference.
$\text{Difference} = \text{Old price} - \text{New price}$ $\text{Difference} = R223.00 - R13.00$ $\text{Difference} = R210.00$
The difference between the new price and the old price of the UTM is $\boxed{\text{R210.00}}$ .

Define VAT. 2. Calculate the VAT amount on the old price of PPH (R988.00) if the VAT rate is 15%. 3. Calculate the difference between the old (R223.00) and new (R13.00) prices of the UTM.

Step-by-step solution

Identify the old price of PPH and the VAT rate.

Calculate the VAT amount.

Round the VAT amount to two decimal places.

Identify the old and new prices of the UTM.

Calculate the difference.

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