LESSON3- CONSUMER MATH- VAT
Value added tax is a form of consumption tax, which is calculated by the price of a product.
Calculating the price, after VAT
Since VAT is a percentage, the VAT must be inserted as a decimal number (e.g. 25% is inserted into the formula as 0,25.
A product without vat, costs 400 euro's without VAT, what is the real price of the product in a shop with 25%vat.
400 + 25% x 400 = 400 + 0.25 x 400 = 400 + 100 = 500
The total price of a product can be calculated with the formula
Total price = price + VAT% x price
Calculating a products price, without VAT
The price of a product without vat, can be calculated with the formula:
Calculating the VAT amount
The vat amount can be calculated with the formula: