the price of a new television is 423. the price includes VAT 17.5%
Work out the cost of the television before VAT was added.
By the end of each year, the value of a television has fallen by 12% of its value at the start of that year.
The value of a television was £423 at the start of the first year.
b) Work out the value of the television at the end of the third year. Give your answer to the nearest penny.
To work out the cost of the television before VAT was added, you need to divide the total price by 1 plus the VAT rate.
In this case, the VAT rate is 17.5%. So, you would divide the price of the television (£423) by 1.175:
Cost before VAT = 423 / 1.175
Cost before VAT = £360
Therefore, the cost of the television before VAT was added is £360.
Now, to work out the value of the television at the end of the third year, you need to apply the 12% decrease in value each year for three years.
To do this, you can calculate it step by step:
First-year value = Initial value - (Initial value * 0.12)
First-year value = £423 - (£423 * 0.12)
First-year value = £423 - £50.76
First-year value = £372.24
Second-year value = First-year value - (First-year value * 0.12)
Second-year value = £372.24 - (£372.24 * 0.12)
Second-year value = £372.24 - £44.67
Second-year value = £327.57
Third-year value = Second-year value - (Second-year value * 0.12)
Third-year value = £327.57 - (£327.57 * 0.12)
Third-year value = £327.57 - £39.31
Third-year value = £288.26
Therefore, the value of the television at the end of the third year is approximately £288.26.