The value of a car including VAT is Rs.382500. If the basic price of the be Rs.340000, find the rate of VAT on cars.

Answer

To find the rate of VAT on the car, we can follow these steps:

### Step 1: Identify the given values
- Value of the car including VAT = Rs. 382,500
- Basic price of the car (excluding VAT) = Rs. 340,000

### Step 2: Calculate the VAT amount
To find the VAT amount, we can use the formula:
\[ \text{VAT Amount} = \text{Value including VAT} - \text{Basic Price} \]

Substituting the values:
\[ \text{VAT Amount} = 382,500 - 340,000 \]
\[ \text{VAT Amount} = 42,500 \]

### Step 3: Calculate the rate of VAT
The rate of VAT can be calculated using the formula:
\[ \text{Rate of VAT} = \left( \frac{\text{VAT Amount}}{\text{Basic Price}} \right) \times 100 \]

Substituting the values:
\[ \text{Rate of VAT} = \left( \frac{42,500}{340,000} \right) \times 100 \]

### Step 4: Simplify the calculation
Calculating the fraction:
\[ \frac{42,500}{340,000} = 0.125 \]

Now, multiply by 100 to get the percentage:
\[ \text{Rate of VAT} = 0.125 \times 100 = 12.5\% \]

### Final Answer
The rate of VAT on cars is **12.5%**.

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