An item costs R2 300 including VAT at 15%. What is the price excluding VAT?

Answer and explanation

Correct answer: C. R2 000

  1. Step 1: Price including VAT is 115% of the price excluding VAT.
  2. Step 2: Price excluding VAT = 2 300 ÷ 1,15 = R2 000.
Answer
R2 000.
Why not the others: R1 955: 15% of the VAT-inclusive price was subtracted, but VAT is 15% of the price before VAT. R2 285: 15 was subtracted as rand. R345: this is not the price before VAT.

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