Reena goes to a shop to buy a radio, costing RS 2568. The rate of value added tax is 7%. She tells the shopkeeper to reduce the price of the radio to such an extant that she has to pay Rs 2568, inclusive of value added tax. Find the reduction needed in the price of the radio.

Explanation

Price of radio inclusive of VAT `= Rs. 2568`
Rate of VAT `=7%`
∴ Actual price
`=Rs.(2568 xx 100)/(100+7)`
`=Rs.2568 xx 107/100`
`=Rs.2400`
But the cost of radio in the beginning
`=Rs. 2568`
∴ Reduction `= Rs. 2568 - Rs. 2400 = Rs. 168`