Ghafoor went to the stationers and bought things worth Rs. 25, out of which 30 paise went on sales tax on taxable purchases. If the tax rate was 6%, then what was the cost of the tax free items?
Ghafoor went to the stationers and bought things worth Rs. 25, out of which 30 paise went on sales tax on taxable purchases. If the tax rate was 6%, then what was the cost of the tax free items?
Explanation
Total cost of items = Rs. 25
Tax amount = 30 paise = Rs. 0.30
Tax rate = 6%
Let's find the cost of the taxable items:
Tax amount = 6% of taxable items
0.30 = (6/100) × taxable items
Taxable items = 0.30 × (100/6) = Rs. 5
Now, let's find the cost of the tax-free items:
Cost of tax-free items = Total cost - Taxable items - Tax amount
= 25 - 5 - 0.30
= Rs. 19.70