While purchasing one item costing ₹ 600, I had to pay the sales tax at 6% and on another costing ₹ 16000, the sales tax was 10%. What percent of sales tax did I pay, approximately, taking the two items together on an average?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 9.9%
The average rate of tax is the total tax divided by the total cost. The two rates cannot just be averaged, because the second item costs far more, so its 10% counts for much more.
Tax on the first item \(=6\%\) of 600 \(=36\)
Tax on the second item \(=10\%\) of 16000 \(=1600\)
Total tax \(=36+1600=1636\) on a total cost of \(600+16000=16600\)
Average rate \(\displaystyle =\frac{1636}{16600}\times100\approx9.86\%\), that is, about 9.9%