The cost of the television before VAT was added is $360 and the value of the television at the end of the third year is $288.3
What is the meaning of VAT ?
VAT is an acronym for Value Added Tax. This is a tax attach to goods and products.
Given that the price of a new television is $423. This price includes VAT in 17 1/2%.
a) The cost of the television before VAT was added is calculated below.
Let the initial cost = C
(17.5 + 100)/100 x C = 423
117.5/100 x C = 423
1.175C = 423
C = 423/1.175
C = $360
b. By the end of the year, the value of a television has fallen by 12% of its value at the start of that year. If the value of a television was $423 at the start of the year, the value of the television at the end of the third year will be calculated by using the formula
A = P(1 - R%)^3
Substitute all the parameters
A = 423(1 - 12/100)^3
A = 423 x [tex]0.88^{3}[/tex]
A = 288.3 dollars
Therefore, cost of the television before VAT was added is $360 and the value of the television at the end of the third year is $288.3
Learn more about VAT here: https://brainly.com/question/20392481
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