PERCENTAGES

PERCENTAGES

Taxes

Rates

• Rates are taxes charged by urban councils, municipal councils, provincial councils etc., from households and businesses that come within their administrative domain.

• This is calculated annually and can be paid in total at the beginning of the year, or in 4 equal quarterly installments once every three months.

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A house of assessed annual value Rs. 36 000 is charged annual rates of 4%. Calculate the rates that have to be paid for a quarter.

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The assessed annual value of a shop within the administrative domain of a certain urban council is Rs. 24 000. The quarterly rates payable on this property is Rs. 300. Calculate the rates percentage charged by the council.

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The assessed annual value of a shop within the administrative domain of a certain urban council is Rs. 24 000. The quarterly rates payable on this property is Rs. 300. Calculate the rates percentage charged by the council.

Customs Duty

• When certain items are imported or exported, a certain percentage of the value of the item has to be paid as taxes to the government. Such taxes are called customs duty. This tax is charged by Sri Lanka Customs

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When a car is imported, 60% of its value has to be paid as customs duty. Find the total amount with the duty included, that it costs a person to import a car worth Rs. 2 000 000.

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If Rs. 18 000 was charged as customs duty when a stock of fruits worth Rs. 300 000 was exported to the Middle East, find the percentage of the value of the stock that the exporter had to pay as customs duty.

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The value of a television set with a 15% customs duty added to it is Rs. 28 750. What is the value of the television set without the duty?

Income Tax

• The government imposes a tax on the annual income of an individual, which is earned as salary, from property or through a business, and which exceeds a certain limit. Such taxes are called income taxes.

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If the annual income of an individual is Rs. 575 000, calculate the income tax he has to pay for the year.

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If the annual income of a certain businessman is Rs. 1 650 000, calculate the total annual income tax he has to pay.

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If a businessman paid an annual income tax of Rs. 56 000 in 2012 according to the income tax rates implemented in 2011 (table 13.1), what is his annual income?

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If the annual income of a certain businessman is Rs. 1 650 000, calculate the total annual income tax he has to pay.

Value Added Tax (VAT)

• When a product or a service is bought, a percentage of its total value is charged as value added tax. The trader who sells the product and the service provider who are both bound to pay this tax, charge it from the consumer.

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A certain person’s monthly telephone charges are Rs. 2 500. If a VAT of 15% is added to this charge, what is his monthly bill?

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VAT of 15% is added to the monthly water bill of a household. If Prathapa pays a total of Rs. 1 725 as his monthly water bill, find the value of the bill without the VAT.

Simple Interest

When calculating the interest for a specific period, if only the initial amount (principal) is taken into consideration, then such interest is called simple interest.

 $I=\frac{PRT}{100}$  

• I= INTEREST

• P= LOAN AMOUNT

• R= INTEREST RATE

• T= TIME

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It took a man 2 years to settle a loan of Rs. 5 000 borrowed at an annual simple interest rate of 10%. How much interest did he pay in total?

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Find the total amount that Senal has to pay to settle a loan in three months, if he borrowed Rs. 8 000 at a monthly simple interest rate of 2%.

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How long will it take for a person who gave a loan of Rs 10 000 at an annual simple interest rate of 12%, to receive an interest of Rs. 3 600?

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If the simple interest that had to be paid for two years, on a loan of Rs.7 500 was Rs.1 200, find the annual simple interest rate that was charged.

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How many years after taking a loan of Rs. 25 000 at an annual simple interest rate of 7.5%, does a person have to pay a total amount of Rs. 28 750 to settle the loan?

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If the total amount that had to be paid after 4 months to settle a loan borrowed at a monthly simple interest rate of 1.5% was Rs.5 300, find the loan amount. The meaning of “A monthly simple interest rate of 1.5%” is that “Rs.1.50 has to be paid as interest for a month for a loan amount of Rs 100.

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If a person took a loan of Rs. P for a period of T years at an annual simple interest rate of R.

(i) Write down an expression for the interest he has to pay for a month.

(ii) Write down an expression for the total interest I that he has to pay for a period of T years.

(iii) Calculate I using the expression in (ii) above when P = 4000, R = 8 % and T = 5.