A bill of KSh 17,400 includes VAT at 16%. What was the price before VAT?
Answer and explanation
Correct answer: C. KSh 15,000
- Step 1: The inclusive price is 116% of the price before VAT. Step 2. Price before VAT = 17,400 x 100/116 = KSh 15,000. Answer: KSh 15,000. Why not the others: KSh 14,616: That takes 16% off the VAT-inclusive price, but VAT was added to the original price. KSh 17,384: That subtracts 16 shillings, not 16 percent. KSh 20,184: That adds 16% to the price that already includes VAT.
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