I can't figure out this question to do with VAT. VAT is charged at 20%. A TV is for sale for £650 inc. VAT in Good Electronics and the same TV is for sale £495 exc. VAT in Wright's Electricals, where is it cheaper?

I can't figure out this question to do with VAT. VAT is charged at 20%. A TV is for sale for £650 inc. VAT in Good Electronics and the same TV is for sale £495 exc. VAT in Wright's Electricals, where is it cheaper?

The question says that the TV is for sale for £650 including VAT at Good Electronics. We need to find out how much it is Wright's Electrics including VAT so we can compare the prices.

Excluding VAT the price is £495. We know that VAT is charged at 20% of the price which does not include VAT. See if you can calculate how much the VAT is.

Let the VAT cost be v and the original ticket price at Wright's Electrics be p:

v= p*20/100 v = £495 *20/100 v= £99

Now to get to the total price (let's call that t) we need to add the VAT to the original ticket price

t = v + p = £99 + £495 = £594

The price including VAT at Wright's Electrics is £594 and we know that at Good Electronics it is £650. So it is cheaper at Wright's Electrics.