Question

In January 2011 the rate of VAT increased from 17.5% to 20%

Answer 1

Answer:  Difference between in price of a car due to increase in VAT is $375.

Step-by-step explanation:

Since e have given that

Price of car = $15000

Rate of VAT = 17.5%

So, Amount of tax becomes

$\frac{17.5}{100}\times 15000\\\\=17.5\times 150\\\\=\ 2625$

So, Total Price he has to pay is given by

$\ 15000+\ 2625\\\\=\ 17625$

but According to question,

Rate of VAT = 20%

So, Amount of tax becomes

$\frac{20}{100}\times 15000\\\\=20\times 150\\\\=\ 3000$

So, Total price he has to pay is given by

$\ 15000+\ 3000\\\\=\ 18000$

Difference between both the price due to increase in VAT is given by

$\ 18000-\ 17625\\\\=\ 375$

Hence, difference between in price of a car due to increase in VAT is $375.

Answer 2

I believe it went from 2625 to 3000, so the difference is £375