Ghafoor went to the stationers and bought things worth Rs. 25, out of which 30 paise went on sales tax on taxable purchases. If the tax rate was 6%, then what was the cost of the tax free items?
- Rs. 15
- Rs. 19.70
- Rs. 15.70
- None of these
Explanation
Total cost of items = Rs. 25
Tax amount = 30 paise = Rs. 0.30
Tax rate = 6%
Let's find the cost of the taxable items:
Tax amount = 6% of taxable items
0.30 = (6/100) × taxable items
Taxable items = 0.30 × (100/6) = Rs. 5
Now, let's find the cost of the tax-free items:
Cost of tax-free items = Total cost - Taxable items - Tax amount
= 25 - 5 - 0.30
= Rs. 19.70
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