Christmas Maths Games

The Prime Minister of the North Pole, in response to the Munch Money, announced a reduction in VAT from 17.5% to 15%.



Having already bought all his Christmas presents before the reduction, Santa is not the best pleased about this, as it will not benefit from the cut.

For example, he bought a games console Wintendo Nii £ 587.50 at the higher rate of tax - how much cheaper it would have been if he had bought it now?

£ 587.50 is the cost of the item + 17.5% of the cost of the item

117.5% = 587.50 pounds

therefore 100% = £ 500

Only 15% of the cost of the VAT article:

500 + 15% = £ 575 500

Hence the savings would have been:

From 587.50 to 575 = £ 12.50

Cost of 15% VAT:

= (£ 587.50/117.5) * 115
= 575

£ 12.50 expensive