1.7 A computer is sold at R4 950,00 excluding value added tax (VAT). Determine the
total price of a computer including VAT.

To calculate the total price of the computer including VAT, you need to add the VAT percentage to the original price. In South Africa, the standard VAT rate is 15%. So, first, calculate the VAT amount by multiplying R4,950.00 by 0.15, which gives you R742.50. Then, add this VAT amount to the original price: R4,950.00 + R742.50 = R5,692.50. Thus, the total price of the computer, including VAT, is R5,692.50.

When dealing with VAT, always remember that it can catch you off guard if you forget to include it in your budget. A common mistake is assuming the listed price is the final cost, so it’s vital to clarify if VAT is included or excluded, especially when making big purchases. Having a calculator handy or using online VAT calculators can help keep your finances in check!