The Leading Maths - 9

Arithmetic Arithmetic Ratio Comparison of two or more numbers or quantities of the same units by division like as fraction. T ={x:x = a:b or a/b or p q; p, q ∈ Z, q ≠ 0} Addition, multiplication, subtraction and division Proportion Ratios with equal value, i.e., equal ratios P ={a:b::c:d or a/b = c/d; p, q ∈ Z, q ≠ 0} Direct, Indirection and Continued proportions Percent and Percentage Topic Description Uses Example Percent One part in a hundred i.e., parts taken on the basis of a whole divided into 100 parts that associated with a specific number. The percent of 250 children out of 1000 people = 250 1000 × 100 = 25% (percent) 9 25 = 9×4 25×4 = 36 100 = 36% 9 25 = 9 25 × 100% = 36% (percent) Percentage A rate or amount per hundred parts or a fraction of 100, i.e., a part of a whole expressed in hundredths, a general relationship allowance, interest commission, profit, result, use, benefit, discount, tax. 20% of Rs. 4500 = 20 100×Rs.4500 = Rs.900 23% = 23 100 = 0.23 Commercial Arithmetic Topic Description Formulae Profit and Loss When SP > CP, it becomes profit (P). P = P% of CP = SP – CP or, SP = CP + P and CP = SP – P When SP < CP, it becomes loss (L). L = L% of CP = CP – SP or, SP = CP – L and CP = SP + L Profit % (P%) = P CP × 100% = SP – CP CP × 100%. Loss % (L%) = L CP × 100% = CP – SP CP × 100%. SP=CP+ P% ofCP=CP(1+P%) =CP(100+P) 100 SP = CP – L% of CP = CP(1–L%) = CP(100–L) 100 Unitary Method A method used to find the value of a single unit from a given multiple, and finding the value of the required units by multiplying the single value unit that is majorly used for ratio and proportion concept. Direct Variation: In this method, increase or decrease in one quantity will cause an increase or decrease in another quantity. e.g., the price of 40 pens is Rs. 400. or, the price of 1 pen is Rs. 400/40 = Rs.10 or, the price of 25 pens is Rs. Rs.10×25 = Rs. 250. Indirect variation: In this method, when increase in a quantity, then decrease in the value of another quantity gets and vice versa. e.g., 20 boys complete a work in 5 days. or, 1 boy completes the work in 5×20 = 100 days. or, 25 boys complete the work in 100/25=4 days. Simple Interest Interest: Paid extra money regularly at a particular rate for the use of money lent. Simple Interest (SI): Interest taken at a particular rate (R) for money lent (P) in the last time (T). Amount (A): The sum of money lent and simple interest. SI = PTR 100 = A – P or, P = A – SI A= SI + P= P+PTR 100 = P(1 + TR 100) = P(100+TR) 100 50 Allied The Leading Mathematics-9 Tax 51

Arithmetic Arithmetic Introduction Activity 1 Rs. 35,500/- Rs. 45,689/- How much more money is to be paid for the TV by the customer when 13% extra payment is added? How much money would the customer pay for the TV ? A teacher has the salary Rs. 45,689. He paid 10% of it to the government. How much amount did he pay to the government ? What is his net income? An agent sold Shyam's house for Rs. 2,75,00,000 to John. Land Revenue Office takes 3% of the sold money of the house from Shyam and 5% from John. How much amount do they pay to the office ? Calculate. How much does Shyam get ? We studied the solving problems related to PERCENTAGE in the class 8. Now, can you solve the above problems? Let's do. For TV For teacher For house Lesser amount for customer = .... Amount to be paid by customer = ...... Amount for customer = .... Net income of the teacher = ...... Amount to the agent = ..... Amount received by Shyam = ...... In the discussion, the amounts paid to others are tax or commission. There are different types of taxes and commissions. In TV, the extra paid amount to the shopkeeper is called value added tax (VAT). The paid amount by the teacher from his/her salary is called income tax. Similarly, the paid amount to the agent by Shyam by selling the house is called commission. The received amount by each worker from the net profit of the company is dividend. CHAPTER 2 TAX 52 Allied The Leading Mathematics-9 Tax 53

Arithmetic Arithmetic 2.1 Income TAX At the end of this topic, the students will be able to: ¾ solve the problems related to taxes in the field of business and daily life. Learning Objectives I Introduction The word ‘tax’ first appeared in the English language in the 14th century. It derived from the Latin 'taxare' which means ‘to assess’ that means to contribute the amount or somethings to state or nation on workers' income and business profits, or added to the cost of some goods, services, and transactions at specified rate. In the ancient period, the states used to levy different kinds of taxes like as a cattle tax, a land tax, agriculture produce, trade, customs, and a tax on the profits of any profession and their people had to pay as crops, voluntary labour, or other materials like as gold, silver, etc. In the 18th century, a Scottish economist and philosopher Adam Smith (1723-1790) attempted to systematize the rules that should govern a rational system of taxation. In his book "The Wealth of Nations" he described Principle of Taxation. He introduced the first modern work in economics. So, he is known as "The Father of Economics" or "The Father of Capitalism". Now, we pay different kinds of taxes (Income Taxes, Corporate Taxes (business income tax), Payroll Taxes (social security funds), Capital Gain Taxes, Property Taxes) knowingly (directly) or unknowingly (indirectly) according as modern tax policy that are greatly influenced by political forces. When we brush teeth, we unknowingly pay tax. How ? Discuss. Similarly, we pay taxes when having meal, using electronic devices, traveling vehicles, studying in academic institutes, studying books, etc. Activity 2 A house owner pays 10% rent tax and 0.50% urban house and land taxes for the house's property from Rs. 50,00,000 to Rs. 1,00,00,000. A job holder with yearly salary up to Rs. 4,00,000 pays 1% income tax. Rs. 20,900 tax is paid for the car up to 1000 cc in Bagmati province. 52 Allied The Leading Mathematics-9 Tax 53

Arithmetic Arithmetic We have curiosities on paying taxes to the Nepal Government. Where does Nepal Government use the tax? They are as follows: (i) How does a government manage budget for administrative works, health, education sectors etc? (ii) Why does the government collect some fund from its people and groups ? Tax is the amount to be paid to the government or its agencies for the service provided to its citizens. It may be levied upon business firm or factory or individuals. Most of us have heard about income tax, sales tax, property tax, house and land tax, entertainment tax, road tax, vehicle tax, import and export tax, value added tax and so on. Nepal government applies the following rate of taxes in the given different fields: a. VAT is levied at a flat rate of 13%, which is applied to the invoice value. b. 1% education service tax is applicable on students' tuition fees and annual feesin institutional (private) schools from the year 2065. c. Import of water transport vehicle, vessel etc. is subject to 5% custom rate. d. Income earned from normal transactions is subject to 25% flat tax. e. Banks and other financial institutions subject to 30% flat tax. f. Entity engaged in business of cigarette, tobacco, cigar, chewing tobacco, alcohol and beer is subject to 30% flat tax. g. Income from bank deposits is taxed separately at source at a flat rate of 5%. h. 1% foreign money exchange tax. i. Meeting allowance is taxed at a rate of 15%, and so on. Importance of Tax The tax money raisesthe national income, boosts of economy and followsthe economic condition. The tax money is used for the common benefit of the people such as construction, expenses of government' staffs, reducing unemployment, etc. The government provides health services, education, security and other social services to its people from the tax money. Types of Taxes On the basis of form, aim, nature and method of taxation, the taxes can divided into two types: Direct tax and Indirect tax. Direct tax is the kind of tax that is not transferable to others. The government of Nepal imposes direct tax on employment investment, property, real estate, land revenue, sales, house rent, sudden incomes etc. on contrary. The indirect tax can be transferred to others. The government of Nepal collects this kind of tax in the form of entertainment tax, value added tax etc. The person or institution does not pay such taxes but charges to the users. We do not go to the details of different types of taxes. We shall simply consider the income tax. Taxes Direct Taxes Indirect Taxes Sales Tax Service Tax Value Added Tax Custom Duty Excise Tax Income Tax Capital Gain Tax Property Tax Vehicle Tax Security Tax Corporate tax, etc. 54 Allied The Leading Mathematics-9 Tax 55

Arithmetic Arithmetic II Income Tax Miss Sharma works in an office. How much does she pay as income tax to the government ? How can we find out ? For this, let's discuss the salary, income, allowance, tax, etc. The salary of Miss Sharma may or may not exceed a certain amount fixed every year by the government. If her annual salary is above a certain minimum amount fixed by the government, she will pay certain percent of the amount more than minimum amount. This paying amount is called income tax and the minimum amount thus fixed is called the tax allowance. The allowance is different for different categories of people such as individual, married couple, joint family, etc. When all the possible allowances are deducted from the total salary or income, whatever remains is known as the taxable income. The income tax is paid on this taxable income. Tax may therefore be described as the money collected by the government from people or firm to provide different types of services such as job, business, investment and immediate gain in Nepal. The rates of income tax and the laws relating to it vary from year to year and are fixed by the government every year during the Budget Session. The rates of income tax in Nepal (Budget Session 2079/080) are as follows: Band/ Slab Tax for residential individual (Single) Tax Rates Tax for residential Couple Tax Rates 1st First Rs. 5,00,000 (Social Security tax, SST) 1% * First Rs. 6,00,000 (SST) 1% * 2nd From Rs. 5,00,001 to Rs. 7,00,000 10% From Rs. 6,00,001 to Rs. 8,00,000 10% 3rd From Rs.7,00,001 to Rs.10,00,000 20% From Rs. 8,00,001 to Rs. 11,00,000 20% 4th From Rs.10,00,001 to Rs.20,00,000 30% From Rs. 11,00,000 to Rs.20,00,000 30% 5th Remaining above Rs. 20,00,000 36% ** Remaining above Rs. 20,00,000 36% ** For detail: https://www.mof.gov.np/, https://www.ird.gov.np/, https://pkf.trunco.com.np/uploads/latest/file/Tax-Rates-2079-80.pdf 54 Allied The Leading Mathematics-9 Tax 55

Arithmetic Arithmetic * Thisisthe Social Security Tax to be deposited in a separate revenue account (11211) provided for this purpose. However, taxpayers registered as sole proprietors or on pension income or income from contribution based pension fund shall not attract social security tax i.e. 1%. And if the taxpayer is depositing the amount in the Social Security Fund (SSF) then for those taxpayers Social Security Tax is not applicable. ** 36% is computed as 30% plus additional 6% on such tax rate applicable to taxable income above Rs. 20,00,000. III Assessable Income and Taxable Income Assessable income is all of the income earned each year that is subject to taxation. Generally, it is the total income. It includes ordinary income derived directly or indirectly from all the sources during the whole year with business profits, or added to the cost of some goods, services and transactions. The income earned by any resident or non-resident person from his employment, business or investment in that income year irrespective of the place of his source of income. Taxable income is the income in which tax is imposed. It is the amount of income after deductions, credits and exemptions or reducing allowance from the total yearly income that is the gross net income. It includes earned incomes from self-employment like the wage, salary, profit, tips and other taxable employee compensation as well as unearned incomes like interest, dividend and bonus, children's allowances, financial gifts, Social Security amounts, etc. Thus, taxable income is simply the amount of the remaining income after reducing all the deductions and credits for the year. ∴ Taxable Income = Assessable or Total Income – Tax Allowance or Deduction or Exemption Important Formulae ∴ Taxable Income = Assessable or Total Income – Tax Allowance Income Tax = Rate of Income Tax × Taxable Income Rate of Income Tax = Income Tax Taxable Income × 100% Net Income = Assessable or Total Income – Income Tax Points to be Remembered 1. An amount of money that a government requires people to pay according to their income, the value of their property, etc., is called tax. 2. The tax levied directly on personal income above a certain minimum amount fixed by the government is called income tax and Income Tax = Rate of Income Tax × Taxable Income. 3. The amount permitted, especially within a set of regulations or for a specified purpose, is called tax allowance. It is the minimum amount fixed by the government in which income tax is not levied that is deducted from gross income in the calculation of taxable income. 4. An amount of money that can be taken off someone's income and savings, or a company's profits before the tax owed is calculated, is called tax exemption. 56 Allied The Leading Mathematics-9 Tax 57

Arithmetic Arithmetic 5. The deduction allowed in income tax on application of income in prescribed instruments, is called tax deduction. 6. All of the income earned each year that is subject to taxation, is called assessable or total income and Assessable or Total Income = Taxable Income + Tax Allowance. 7. The amount more than tax allowance in which income tax islevied, is called taxable income in which tax is imposed and Taxable Income = Total Income – Tax Allowance 8. The charged rate fixed by the government on the taxable income of the personal income is called the rate of income tax and Rate of Income Tax = Income Tax Taxable Income × 100%. 9. The income after reducing the income tax from total income is called net income and Net Income = Assessable or Total Income – Income Tax Example-1 The monthly income of a boy is Rs. 61,500. Answer the following questions: (a) Write the definition of tax. (b) Find the yearly total income of the boy. (c) How much income tax does he pay if the rates are used from the table? Band Tax for residential individual (Single) Rates 1st First Rs. 5,00,000 (Social Security tax, SST) 1% * 2nd From Rs. 5,00,001 to Rs. 7,00,000 10% 3rd From Rs.7,00,001 to Rs.10,00,000 20% 4th From Rs.10,00,001 to Rs.20,00,000 30% 5th Remaining above Rs. 20,00,000 36% ** (d) Find his net yearly income after paying tax. Solution: (a) A compulsory contribution to state revenue, levied by the government on all types of employee' income is called tax. (b) Monthly income of a boy = Rs. 61500 ∴ Yearly income of the boy = Rs. 61,500 × 12 = Rs.7,38,000 (c) Now, from the above tax slab table, His yearly income is divided as, Rs.7,38,000 = First Rs.5,00,000 + From Rs.5,00,001 to Rs.7,00,000) + From Rs.7,00,000 to Rs.7,38,000 = First 5,00,000 + Next Rs. 2,00,000 + Next Rs. 38,000 ∴ For 1st band, tax on Rs. 5,00,000 = 1% of 5,00,000 = 1 100 × Rs. 5,00,000 = Rs. 5,000 56 Allied The Leading Mathematics-9 Tax 57

Arithmetic Arithmetic For 2nd band, tax on next Rs. 2,00,000 = 10% of Rs. 2,00,000 = 10 100 × Rs. 2,00,000 = Rs. 20,000 For 3rd band, tax on next Rs. 38,000 = 20% of Rs. 38,000 = 20 100 × Rs. 38,000 = Rs. 7,600 ∴ Total income tax = Rs. 5,000 + Rs. 20,000 + Rs. 7,600 = Rs. 32,600. (d) Hence, the net yearly income = Rs.7,38,000 – Rs. 32,600 = Rs. 7,05,400. Example-2 Mrs. Sophiya is a officer of Nepal Telecom. Her monthly salary is Rs. 45,689. She gets 23 months salary in a year. She deposits 10% of her yearly income in Citizen Investment Fund (CIF). Female rebates 10% on the tax liability. (a) Define income tax. (b) Find her yearly total income without CIF. (c) How much net income tax does she pay if the rates are used from the table? Slab Tax for residential Couple Rates 1st First Rs. 6,00,000 (SST) 1% * 2nd Next Rs. 2,00,000 10% 3rd Next Rs. 3,00,000 20% 4th Next Rs. 9,00,000 30% 5th Remaining above Rs. 20,00,000 36% ** (d) How much percent tax does she pay in total ? Find it. Solution: (a) A tax that a government levies on the income of its citizens is called income tax. (b) Given, monthly income of Mrs. Sophiya = Rs. 45,689 Her yearly income for 23 months = Rs. 45,689 × 23 = Rs. 10,50,847 Deposited amount in CIF = 10% of Rs.10,50,847 = 10 100 × Rs. 10,50,847 = Rs. 1,05,084.70 ∴ Her yearly income without CIF, taxable income = Yearly Income – Deposited amount in CIF = Rs. 10,50,847 – Rs. 1,05,084.70 = Rs. 9,45,762.30 (c) Mrs. Sphiya is a married person. Now, from the given tax band table, Her yearly income is divided as, Rs. Rs.9,45,762.30 = First 6,00,000 + Next Rs. 2,00,000 + Next (Rs. 9,45,762.30 – Rs. 8,00,000) = First 6,00,000 + Next Rs. 2,00,000 + Next Rs. 1,45,762.30 58 Allied The Leading Mathematics-9 Tax 59

Arithmetic Arithmetic ∴ For 1st slab, tax on Rs. 6,00,000 at 1% = 1% of 6,00,000 = 1 100 × Rs. 6,00,000 = Rs. 6,000 For 2nd slab, tax on next Rs. 2,00,000 at 10% = 10% of Rs. 2,00,000 = 10 100 × Rs. 2,00,000 = Rs. 20,000 For 3rd slab, tax on next Rs. 1,45,762.30 at 20% = 20% of Rs. 1,45,762.30 = 20 100 × Rs. 1,45,762.30 = Rs. 29,152.46 ∴ Total income tax = Rs. 6,000 + Rs. 20,000 + Rs. 29,152.46 = Rs. 55,152.46. Again, Mrs. Sophiya is a female. So, she rebates 10% on the tax liability. ∴ Rebate amount on tax = 10% of Rs. 55,152.46 = Rs. 5,515.25. ∴ Net income tax = Rs. 55,152.46 – Rs. 5,515.25 = Rs. 49,637.21. (d) Paid tax percent = Total income tax Taxable income × 100% = Rs. 549,637.21 Rs.9,45,762.30 × 100% = 5.25% Example-3 Samir is an unmarried newly third class Secretary of Ministry of Finance. His monthly salary with dearness allowance is Rs. 74,082. He gets one month salary for expense of festival at once. 10% of his monthly salary is deposited in Employees' Provident Fund (EPF) and Rs. 3,000 in life insurance in each month. The government deposits the same EPF amount in the fund. (Use the tax rates in this book.) (a) What is assessable income ? Define it on the basis of Samir's income. (b) Find his yearly total assessable income. (c) Find his taxable income. (d) How much income tax does he pay in total ? Find it. Solution: (a) The total income earned during a year with salary, deposited amounts in Employees' Provident Funs and life insurance is called an assessable income. (b) Given, monthly salary with dearness allowance = Rs. 74,082 ∴ His monthly salary without dearness allowance = Rs. 74,082 – Rs. 2,000 = Rs. 72,082 His yearly income = Rs. 72,082 × 12 = Rs. 8,64,984 Amount of Dearness allowance for a year = Rs. 2000 × 12 = Rs. 24,000 58 Allied The Leading Mathematics-9 Tax 59

Arithmetic Arithmetic Amount for one month salary for expense of festival = Rs. 72,082 Yearly deposited amount for EPF by the government = 10% of Rs.8,64,984 = Rs. 86,498.40 ∴ His yearly total assessable income = Salary amount + Amount of Dearness allowance for a year + Amount for expense of festival + Amount for EPF = Rs. 8,64,984 + Rs. 24,000 + Rs. 72,082 + Rs. 86,498.40 = Rs. 10,47,564.40 (c) Amount for life insurance in a Month = Rs. 3,000 Amount for life insurance in a year = Rs. 3,000 × 12 = Rs. 36,000 Total EPF amount = Rs. 86,498.40 × 2 = Rs. 1,72,996.80 ∴ Total tax free income = Amount for life insurance + Total EPF amount = Rs. Rs. 36,000 + Rs. 1,72,996.80 = Rs. 2,08,996.80 Now, 1 3 of his yearly total assessable income = 1 3 × Rs. 10,47,564.40 = Rs. 3,49,188.13 which is more than Rs. 3,00,000. Here, the sum of the amount for life insurance and total EPF amount is less than 1 3 of total assessable income. So, the actual tax free amount is Rs. 2,08,996.80. ∴ Taxable income of Samir = yearly total assessable income – actual tax free amount = Rs. 10,47,564.40 – Rs. 2,08,996.80 = Rs. 8,38,567.60 (d) Samir is unmarried person. Now, from the given tax band table, Taxable income of Samir is divided as, Rs. 8,38,567.60 = First 5,00,000 + Next Rs. 2,00,000 + Next (Rs. 8,38,567.60 – Rs. 7,00,000) = First 5,00,000 + Next Rs. 2,00,000 + Next Rs. 1,38,567.60 ∴ For 1st slab, tax on Rs. 5,00,000 at 1% = 1% of 5,00,000 = Rs. 5,000 For 2nd slab, tax on next Rs. 2,00,000 at 10% = 10% of Rs. 2,00,000 = Rs. 20,000 For 3rd slab, tax on next Rs. 1,38,567.60 at 20% = 20% of Rs. 1,38,567.60 = Rs. 27,713.52 ∴ Total income tax of Samir = Rs. 5,000 + Rs. 20,000 + Rs. 27,713.52 = Rs. 52,713.52. 60 Allied The Leading Mathematics-9 Tax 61

Arithmetic Arithmetic Example-4 The monthly net salary rate of married lower secondary level teacher of 6 grades is Rs. 34,006. S/he gets Rs. 920 for one grade, Rs. 2,000 for dearness allowance in every month and one month salary for festival allowance at once. 10% of the monthly salary is deposited in Employees' Provident Fund (EPF), 5% in Citizen Investment Fund (CIF) and Rs. 400 in life insurance in each month. The government deposits the same EPF and insurance premium amounts in the related offices. (Use the tax rates in this book.) (a) Define tax exemption. (b) Find his/her assessable income. (c) Find his/her total income tax. (d) How much amount does s/he get in each month without expense of festival? Solution: (a) A reduction or removal income of a liability to make a compulsory payment, is called tax exemption. (b) Given, monthly income of lower secondary level teacher = Rs. 34,006 Grade amount for 6 grades = Rs. 920 × 6 = Rs. 5520 ∴ Total monthly income = Rs. 34,006 + Rs. 5520 = Rs. 39,526 So, yearly salary = Rs. 39,526 × 12 = Rs. 4,74,312 Amount of Dearness allowance for a year = Rs. 2000 × 12 = Rs. 24,000 Amount for one month salary for expense of festival = Rs. 39,526 Yearly deposited amount for EPF by government = 10% of Rs. 4,74,312 = Rs. 47,431.20 Yearly deposited amount for life insurance by government = Rs. 400 × 12 = Rs. 4,800 ∴ Assessable income ofthe teacher =Yearly salary +Amount of Dearness allowance for a year + Amount for expense of festival + Amount for EPF + Amount for insurance premium = Rs. 4,74,312 + Rs. 24,000 + Rs. 39,526 + Rs. 47,431.20 + Rs. 4,800 = Rs. 5,90,069.20 (c) Total EPF amount = Rs. 47,431.20 × 2 = Rs. 94,862.40 Amount for life insurance in a month = Rs. 400 + Rs. 400 = Rs. 800 ∴ Amount for life insurance in a year = Rs. 800 × 12 = Rs. 9,600 Yearly deposited amount for CIF from own salary = 5% of Rs. 4,74,312 = Rs. 23,715.60 ∴ Total tax free income = Total EPF amount + Amount for life insurance + Amount for CIF = Rs. 94,862.40 + Rs. 9,600 + Rs. 23,715.60 = Rs. 1,28,176 60 Allied The Leading Mathematics-9 Tax 61

Arithmetic Arithmetic Now, 1 3 of his/her yearly total assessable income = 1 3 × Rs. 5,90,069.20 = Rs. 1,96,689.73, which is less than Rs. 3,00,000. Here, the sum of the amount for life insurance, total EPF amount and amount for CIF is less than 1/3 of total assessable income. So, the actual tax free amount is Rs. 1,28,176. ∴ Taxable income for the teacher =Assessable income –Actual tax free amount = Rs. 5,90,069.20 – Rs. 1,28,176 = Rs. 4,61,893.20 The teacher is married person. Since the taxable income of the teacher is less than Rs. 6,00,000, so s/he only pays 1% Social Security tax (SST). ∴ Income tax of the teacher = 1% of Rs. 4,61,893.20 = Rs. 4,618.93. (d) Monthly salary of the teacher = Salary rate + 6 × Grade rate = Rs. 34,006 + 6 × Rs. 920 = Rs. 39,526 Amount for EPF = 10% of Rs. 39,526 = Rs. 3,952.60 Amount for life insurance = Rs. 400 Amount of Dearness allowance a month = Rs. 2000 Amount for CIF = 5% of Rs. 39,526 = Rs. 1,976.30 ∴ Total monthly income of the teacher = Monthly salary + Amount for EPF + Amount for life insurance + Amount of Dearness allowance = Rs. 39,526 + Rs. 3,952.60 + Rs. 400 + Rs. 2000 = Rs. 45,878.60 Deduction amount = 2 × Amount for EPF + 2 × Amount for life insurance + Amount for CIF = 2 × Rs. 3,952.60 + 2 × Rs. 400 + Rs. 1,976.30 = Rs. 10,681.50 ∴ Net monthly handed income = Total monthly income – Deduction amount = Rs. 45,878.60 – Rs. 10,681.50 = Rs. 35,197.10 Example-5 A married businessman does not have to pay income tax on first income up to Rs. 6,00,000, 10% income tax on next Rs. 2,00,000, 20% on next Rs. 3,00,000, 30% on next Rs. 9,00,000 and 36% (30% + 6%) on remaining above Rs. 20,00,000. If a businessman has the income of Rs. 23,50,000. (a) Define taxable income. (b) How much does he pay income tax in total ? Find it. (c) Find the net income. 62 Allied The Leading Mathematics-9 Tax 63

Arithmetic Arithmetic Solution: (a) The amount of the remaining income after reducing all the deductions and credits for the year, which is subject to tax, is called taxable income. (b) Now, divide the yearly income of the businessman according as the given tax bands below; Rs. 23,50,000 = Rs. 6,00,000 + Rs. 2,00,000 + Rs. 3,00,000 + Rs. 9,00,000 + Rs. 3,50,000 (c) Now, Income tax = 0% of Rs. 6,00,000 + 10% of Rs. 2,00,000 + 20% of Rs. 3,00,000 + 30% of Rs. 9,00,000 + {30% of Rs. 3,50,000 + 6% (30% of Rs. 3,50,000)} = 0 + 0.1% × Rs. 2,00,000 + 0.2 × Rs. 3,00,000 + 0.3 × Rs. 9,00,000 + 0.06(0.3 × Rs. 3,50,000) = Rs. 20,000 + Rs. 60,000 + Rs. 2,70,000 + Rs. 1,05,000 + 0.06 × Rs. 1,05,000 = Rs. (20,000 + 60,000 + 2,70,000 + 1,05,000 + 6,300) = Rs. 4,61,300 Example-6 Aariya deposited Rs. 18,00,000 in a fixed account of a commercial bank for 3 years at 12.13% in simple interest. If she has to pay 5% income tax on the interest received by her. (a) Define simple interest. (b) How much does she get interest after reducing income tax for 3 years? Find it. (c) How much does the bank provide her after 3 years? Find it. Solution: (a) The interest taken only on principal amount at once under the given time period, is called simple interest. (b) Here, Deposited amount by Aariya, Principal (P) = Rs. 18,00,000 Duration of time (T) = 3 yrs, Simple Interest rate (R) = 12.13% Income tax rate on simple interest (R1 ) = 5% Now, we have Simple interest amount (SI) = PTR 100 = Rs. 18,00,000 × 3 × 12.13 100 = Rs. 6,55,020 Income tax amount on simple interest = 5% of Simple interest = 0.05 × Rs. 6,55,020 = Rs. 32,751 ∴ Interest amount after income tax = Rs. 6,55,020 – Rs. 32,751 = Rs. 6,22,269 (c) Total amount with interest (A) = P + SI = Rs. 18,00,000 + Rs. 6,22,269 =Rs. 24,22,269 Hence, the bank provides Rs. 24,22,269 to Aariya after 3 years. 62 Allied The Leading Mathematics-9 Tax 63

Arithmetic Arithmetic PRACTICE 2.1 Read Think Understand Do Keeping Skill Sharp 1. (a) Write the formula to calculate the taxable income when total income and allowance are given. (b) Write the relation between the net income, income tax and total income. 2. (a) The annual income of a girl is Rs. 5,50,000. If she pays Rs. 55,000 annually in Citizen Investment Trust, what is her taxable income ? (b) The annual income of the staff of a commercial bank is Rs. 8,35,600. If he/she pays 1% of social security tax, how much tax should he/she pay? (c) A man earns Rs. 5,24,000 and tax allowance is Rs. 4,00,000. Find his income tax at 10% p.a. 3. (a) The royalty of a book author is Rs. 354000. If he pays 10% of income tax, how much tax should he pay? (b) A man pays Rs. 39810 as a income tax to the government. If his income is Rs. 265400, what is the rate of income tax? (c) The monthly salary of a married civil servant is Rs. 38,900. If 15% tax is levied on the yearly income more than Rs. 4,50,000, how much tax should he pay ? Check Your Performance 4. (i) The monthly income of an unmarried man is Rs. 55,980. Then, (a) Define tax. (b) Find his yearly income. (c) How much does he pay income tax if the rates are used from the table? Band Tax for residential individual Rates 1st First Rs. 5,00,000 (Social Security tax, SST) 1% * 2nd From Rs. 5,00,001 to Rs. 7,00,000 10% 3rd From Rs.7,00,001 to Rs.10,00,000 20% 4th From Rs.10,00,001 to Rs.20,00,000 30% 5th Remaining above Rs. 20,00,000 36% ** (d) Find his net income after paying tax. (ii) The monthly salary of a girl is Rs. 72,082. 10% rebates in the income tax for female. Answer the questions of the equation 4. i). (a) What is income tax ? Define it. (b) Find his assessable income. (c) How much does he pay income tax if the rates are used from the table of Q. No. 4. i)? (d) Find his net income after paying tax. 64 Allied The Leading Mathematics-9 Tax 65

Arithmetic Arithmetic 5. (i) Mrs. Arpana is a section officer of Nepal Electricity Authority. Her monthly salary is Rs. 43,689. She gets Rs. 2,000 for dearness allowance in 12 months only and 24 months salary in a year. She deposits 15% of his yearly income in Citizen Investment Fund (CIF). Female rebates 10% on the tax liability. (a) Define assessable income. (b) Calculate her assessable income. (c) How much does she pay net income tax by using the tax slab table? Slab Tax for residential Couple Rates 1st First Rs. 6,00,000 (SST) 1% * 2nd Next Rs. 2,00,000 10% 3rd Next Rs. 3,00,000 20% 4th Next Rs. 9,00,000 30% 5th Remaining above Rs. 20,00,000 36% ** (d) How much percent tax does she pay in total ? Find it. (ii) Mr. Sharma is a deputy secretary of Kathmandu Upatyaka Khanepani Limited (KUKL). His monthly salary is Rs. 48,737. He gets Rs. 2,000 for dearness allowance in each month and 18 months net salary in a year. He deposits 10% of his assessable income in Citizen Investment Fund (CIF). He is married person. (a) Define taxable income. (b) Calculate his taxable income. (c) How much does he pay net income tax by using the above tax slab table? (d) How much percent tax does she pay in total ? Find it. 6. (i) Amar is a unmarried newly secondary class joint secretary of Ministry of Finance. His monthly salary with dearness allowance is Rs. 58,787. He gets one month salary for expense of festival at once. 10% of his monthly salary is deposited in Employees' Provident Fund (EPF) and Rs. 3,300 in life insurance in each month. The government deposits the same EPF amount in the fund. (Use the tax rates in this book.) (a) What is assessable income ? Define it on the basis of Amar's income. (b) Find his yearly total assessable income. (c) Find taxable income of Amar. (d) How much income tax does he pay in total ? Find it. (ii) Sunil is a married fifth class heavy driver of Ministry of Home Affairs. His monthly salary with dearness allowance is Rs. 43,561. He gets one month salary for expense of festival at once. 10% of his monthly salary is deposited in Employees' Provident Fund (EPF) and Rs. 1,000 in life insurance in each month. The government deposits the same EPF amount in the fund. (Use the tax rates of this book.) Answer the similar questions in Q. No. 6. (i). 64 Allied The Leading Mathematics-9 Tax 65

Arithmetic Arithmetic 7. (i) The monthly net salary rate of a married secondary level teacher of 4 grades is Rs. 43,689. S/he gets Rs. 1,456 for one grade, Rs. 2,000 for dearness allowance in every month and one month salary for festival allowance at once. 10% of his/her monthly salary is deposited in Employees' Provident Fund (EPF), 10% in Citizen Investment Fund (CIF) and Rs. 400 in life insurance in each month. The government deposits the same EPF and insurance premium amounts in the related offices. (Use the tax rates in this book.) (a) What is tax allowance ? (b) Find his/her assessable income. (c) Find his/her total income tax. (d) How much amount does s/he get in each month without expense of festival ? (ii) The monthly net salary rate of a married Nayab Subba of 10 grades is Rs. 34,730. S/ he gets Rs. 1,158 for one grade and Rs. 2,000 for dearness allowance in every month. Also, he/she gets 13 months salary with one month salary for festival allowance at once. 10% of his/her monthly salary is deposited in Employees' Provident Fund (EPF), 5% in Citizen Investment Fund (CIF) and Rs. 400 in life insurance in each month. The government deposits the same EPF and insurance premium amounts in the related offices. (Use the tax rates in this book.) (a) Write the relation among assessable income, tax allowance and taxable income. (b) Find his/her total income. (c) Find his/her total income tax. (d) How much percent does s/he pay income tax in total ? 8. (i) A married proprietor of a firm does not have to pay income tax on first income up to Rs. 6,00,000, 10% income tax on next Rs. 2,00,000, 20% on next Rs. 3,00,000, 30% on next Rs. 9,00,000 and 36% (30% + 6%) on remaining above Rs. 20,00,000. If the proprietor earns the income Rs. 21,90,000. (a) What is tax rate ? (b) How much does s/he pay income tax in total ? Find it. (c) How much yearly net income did s/he hardly receive? Find it. (ii) An unmarried proprietor of a firm does not have to pay income tax on first income up to Rs. 5,00,000, 10% income tax on next Rs. 2,00,000, 20% on next Rs. 3,00,000, 30% on next Rs. 10,00,000 and 36% (30% + 6%) on remaining above Rs. 20,00,000. If a proprietor earns the income Rs. 25,45,000. (a) What is taxable income ? (b) How much does s/he pay income tax in total ? Find it. (c) How much yearly net income does s/he hardly receive? Find it. 66 Allied The Leading Mathematics-9 Tax 67

Arithmetic Arithmetic 9. (i) Samata deposited Rs. 15,00,000 in a fixed account of Nepal Bank Limited for 5 years at 11% simple interest. If she has to pay 5% income tax on the interest received by her. (a) What is the interest ? Define it. (b) How much does she get interest after reducing income tax for 5 years? Find it. (c) How much does the bank provide her after 5 years? Find it. (ii) Salman deposited Rs. 60,50,000 in a fixed account of a commercial bank for 3 years at 12.13% in simple interest. If he has to play 5% income tax on the interest received by her. (a) Define simple interest. (b) How much does she get simple interest after for 3 years? Find it. (c) How much does the bank provide him after 3 years? Find it. 2. (a) Rs. 495000 (b) Rs 8356 (c) Rs. 12400 3. (a) Rs 35400 (b) 15% (c) Rs. 4140 4. (i) (b) Rs. 671760 (c) Rs. 22176 (d) Rs. 649584 (ii) (b) Rs. 864984 (c) Rs. 52197.12 (d) Rs. 812786.88 5. (i) (b) Rs. 1072536 (c) Rs. 44146.01 (d) 4.82% (ii) (b) Rs. 901266 (c) Rs. 28227.88 (d) 3.48% 6. (i) (b) Rs. 830375.40 (c) Rs. 654486.60 (d) Rs. 24448.66 (ii) (b) Rs. 614166.20 (c) Rs. 502419.80 (d) Rs. 5024.20 7. (i) (b) Rs. 731884.60 (c) Rs. 5440.38 (d) Rs. 41210.90 (ii) (b) Rs. 737343 (c) Rs. 577235.50 (d) 1% 8. (i) (b) Rs. 418400 (c) Rs. 177160 (ii) (b) Rs. 582200 (c) Rs. 1962800 9. (i) (b) Rs. 783750 (c) Rs. 2283750 (ii) (b) Rs. 2201595 (c) Rs. 8141515.25 Answers Project Work Ask your family income to your parents or guardians. Calculate the tax amount paid by your family and net income amount of your family by using necessary tax slab for your family. 66 Allied The Leading Mathematics-9 Tax 67

Arithmetic Arithmetic 2.2 Value Added TAX (VAT) I Introduction to VAT Let's discuss the following taxes. Activity 1 Price: Rs. 28,50,000 Additional Tax: 13% Buying cost: Rs. 25,600 Additional tax: 13% When we buy a car, we pay custom tax, road tax, profit, rent, advertisement, etc. on its original price. How much more amount does a man pay for the given car ? What is the total cost for the car? How much more money do the three girls pay to the shopkeeper ? What is the total cost for these goods? Additional amount to be paid = .... Total cost including additional tax = ...... Additional amount to be paid = .... Total cost including additional tax = ...... Customers pay some percent additional tax on the selling price of the goods, service and charges other than basic needs to the government by customers or users. This is called value added tax (VAT). It is a relatively new indirect consumption tax levied on the value creation or addition. Value Added Tax (VAT) is to be paid by the customer for the service of purchasing and supply provided to the customer.It is chargeable on the supply of goods and servicesincluding commission paid to the agent and insurance services. VAT is worked out on the total amount including the profit after the deduction of the discount given on the purchasing of the article. VAT is calculated on the basis of the given rate which may differ country by country. Also, VAT is free on the basic goods, education, health, exporting and importing goods, etc. On 10 April 1954, France became the first country to introduce a modern variation form of VAT by Maurice Laure (1917-2001) In the context of Nepal, the VAT is levied at the rate of 13% on the net price of the articles. The concept of VAT was introduced on 1997 (2053 BS) in Nepal for increasing government revenue mobilization and transparency in tax administration. VAT was levied in place of the old sales tax, hotel tax, contract tax and entertainment tax at first. However, it could not be implemented fully until the FY1998/99 (BS 2055) due to political instability and strong opposition from the business community. It is administered by the Inland Revenue Department of Nepal. For detail: https://ird.gov.np/about/background Maurice Laure 68 Allied The Leading Mathematics-9 Tax 69

Arithmetic Arithmetic II Discount In the markets, when we go to the shop the goods, we can see different offers provided by shops and companies or dealers or retailers such as Dashain offer, New Year Offer, Festival Offers, Opening Offer, etc. In the offer, we get some amount reducing on the original price of the goods. This reducing amount on the goods is called discount. It gives in the form of cash or percentage. Activity 2 Observe the offers on Mobile and TV sets, and discuss on their prices. Original Price Rs. 25,200 Selling Price Rs. ............ What is the original price of the mobile set ? => ................. How much percent of discount has announced on the occasion of Dhashin? => ........... How much does a customer get the discount and how much pay for it ? ............................................ Selling Price Rs. ............ Rs. 5460/- OFF Original Price Rs. 45,500 What is the original price and discount amount on the TV set ? => ....... How much does a customer pay for the TV set ? => ........ How much percent of discount will the customer get on the New Year Offer? ............................................ From the discussion above, the original prices of the mobile and TV sets are called their marked prices (MP) or listed price. The company or shopkeeper reduces certain percent on the price of the mobile or TV. This is called discount percentage (D%). The company or shopkeeper gives some amount on the price of the mobile or TV. This is called discount amount (D). The price after reducing discount on the marked price of the mobile or TV, is called selling price (SP) or actual selling price (ASP) or net price that is paid by customer. Therefore, Selling price (SP) = Marked price (MP) – Discount amount (D) or, Discount Amount (D) = Marked price (MP) – Selling price (SP) or, Marked price (MP) = Selling price (SP) + Discount amount (D) Also, Discount amount (D) = Discount percent (D%) of Marked Price (MP) and, Discount percent (D%) = Discount amount (D) Marked price (MP) × 100% = MP – SP MP × 100% For more, Net price/(actual) selling price (SP/ASP) = MP – D = MP – D% of MP = MP(1 – D%) = MP 1 – D 100 i.e., SP/ASP = MP(100 – D) 100 For example, SP of the mobile = MP × 100 – D 100 = Rs. 25,200 × 100 – 12 100 = Rs. 25,200 × 88 100 = Rs. 25,200 × 0.88 = Rs. 22,176 In short, if D% = 15, then SP = MP × 0.85. How ? Allied Traders Kathmandu Nepal Customer's Name: Alija KC B.N. 23 SN Pariculars Qty Rate Amount (in Rs.) 1. Mobile 1 ..... 25,200/- In words: Twenty two thousand one hundred sev- enty six only. Sub Total 25,200/- 12% Discount 3,024/- Total 22,176/- 68 Allied The Leading Mathematics-9 Tax 69

Arithmetic Arithmetic III Calculation of VAT and SP with VAT Activity 3 In a shop A, there is no discount on the price of the laptop and add 13% VAT on it. What is the price of the given laptop without VAT ? How much should we pay for it with VAT ? It is simple. VAT Amount = ............. Selling price with VAT (ASP1 ) = ............. In another shop B, there is 5% discount on the price of the same model laptop and add 13% VAT on it. What is the price of the given laptop after 5% discount ? How much should we pay for it with VAT ? For it, we follow little more steps that are also easier and simple. Discount amount (D) = .......; Selling price after discount (ASP) = ...... VAT Amount = .........; Selling price with VAT (VSP2 or SPVAT) = ....... In which shop do we pay more money and how much ? Compare VAP1 and VSP2 and then tell the answers. Look the VAT bills of the shops A and B are as follows; Note: The expenses on rent, transportation, wages, local tax, service charge, profit etc are added on ASP before computing VAT amount. VAT is indirect tax. How much with 13% VAT ? Fixed Price Rs. 42,500 without VAT Oh, I see ! ASP < MP, VSP > ASP when there is some discount and VAT. Oh! ASP = MP when there is no discount. What is its SP after 5% discount ? How much with 13% VAT after 5% discount? Original Price Rs. 45,000 without VAT In short, if VAT% = 13%, VSP = ASP × 1.13. How ? In short, if D% = 5%, ASP = MP × 0.95. How ? In short, if VAT% = 13%, SP = MP × 1.13. How ? SHOP A Anuja Mahat 23/1/2080 23/1/2080 23/1/2080 23/1/2080 Anuja Keshab Anuj Binod 1. Dell Laptop 1 42,500 42,500/- 1. Dell Laptop 1 45,000 45,000/- 42,500/- _____ 42,500/- 5,525/- 48,025/- 45,000.00 5% 2,250.00 42,750 13% 5,557.50 48,307.50 Asan, Kathmandu 1 2 1 13 4 5 2 3 1 2 1 13 4 5 4 5 Asan, Kathmandu Anuj Mahat SHOP B D = D% of MP ASP = MP - D VAT = VAT% of ASP VSP = ASP + VAT Marked Price (MP) Discount (D) Actual selling price (ASP) VAT amount (VAT) Selling price with VAT (VSP) Forty eight thousand and twenty five only. Forty eight thousand three hundred seven and fifty paisa only. 70 Allied The Leading Mathematics-9 Tax 71

Arithmetic Arithmetic For the above activity; The discount taken on the marked price (MP) of the item So, Discount amount (D) = D% of MP, which is the difference between MP and SP/ASP. Then, Discount amount (D) = MP – ASP Therefore, Net/Selling price after discount (SP/ASP) = MP – D = MP – D% of MP = MP(1 – D%) = MP 1 – D 100 i.e., SP/ASP = MP(100 – D) 100 Further more, the VAT amount is added to the actual selling price, it becomes the bill of total payment, which is called the selling price with VAT (VSP or SP with VAT / SPVAT). Therefore, VAT amount (VAT) = VAT% of ASP VSP = ASP + VAT = ASP + VAT% of ASP = ASP(1 + VAT% ) = ASP 1 + VAT 100 ∴ VSP = ASP 100 + VAT 100 We have, ASP = MP 100 – D 100 Therefore, VSP = MP 100 – D 100 100 + VAT 100 i.e., VSP = MP(100 – D) (100 + VAT) 100 × 100 and MP = VSP × 100 × 100 (100 – D) (100 + VAT) + Profit (P) – Discount (D) + Commission + Transportation + VAT + Service Charge + Insurance + Local Tax + Wages – Loss (L) VSP Chart Cost Price (CP) Marked Price (MP) Actual Selling Price (ASP) Selling Price with VAT (VSP) Also, VAT = VSP – ASP = VAT% of ASP VSP = ASP + VAT = MP – D + VAT If D% = 0%, then VSP = MP(100 + VAT) 100 In short; for shop A, VSP = MP(100 + VAT) 100 = 425000(100 + 13) 100 = 42500 × 113 100 = 42500 × 1.13 = 48025 For shop B, VSP = MP(100 – D) (100 + VAT) 100 × 100 = 45000(100 – 5) (100 + 13) 100 × 100 = 45000 × 95 × 113 100 × 100 = 45000 × 0.95 × 1.13 = 48307.50 70 Allied The Leading Mathematics-9 Tax 71

Arithmetic Arithmetic IV Working of VAT in Nepal Value Added Tax (VAT) is applicable on all goods and services supplied in Nepal without basic needs and goods. VAT is a major source of indirect taxes. As per the statistics of Government of Nepal, VAT covers almost of Tax Revenue. It is levied on the taxable transaction at 13%. In VAT system, producers, distributors and people providing services raise VAT transaction. The difference between the VAT collected on sales and the VAT charged on purchases determines the amount a registrant must remit or the amount that may be claimed as a refund. So, every person registered in VAT must submit VAT return. Usually VAT return is filed every month, within 25th of every Nepali month. If the registered person can apply for the VAT refund along with the filing of VAT return of the same month, then the amount is determined by the tax officer and refunded within 30 days of application. (For detail: https://nepal.gov.np:8443/NationalPortal/ view-page?id=94, https://tax.bakertillynepal.com/vat-24/) Observe the chart of collecting and depositing VAT amount and refund below; Producer VAT Amt Deposit VAT Amt Deposit & Refund VAT Amt Deposit & Refund VAT Amt Deposit & Refund Dealer Whole seller Retailer Customer Chart of depositing VAT amount and refund Note : Producer, distributor/dealer, whole seller, retailer pay the collecting different VAT amounts for the same item at once. For example; If a company produces an item of the cost Rs. 1,000 including its all expenses and profit, then it is sold to dealer, dealer to whole seller, whole seller to retailer and retailer to customer with adding all expenses and profit (extra value in supposition in table below) and 13% VAT in each transaction. Now let us calculate the VAT amount to be deposited to the Inland Revenue Department (IRD) and total amount to be paid by the customer shown in the table below. Channel (Amt in Rs.) Cost price Extra value ASP VAT VSP Dep. VAT VAT for IRD Refund Producer to Dealer 1000 ----- 1000 130 1130 130 130 ----- Dealer to Whole seller 1000 500 1500 195 1695 195 65 130 Whole seller to Retailer 1500 500 2000 260 2260 260 65 195 Retailer to Customer 2000 1000 3000 390 3390 390 130 260 In the above table, ASP = CP + Extra value, VAT = 13% of ASP, VSP = ASP + VAT, Dep. VAT = VAT, VAT for IRD = Successive difference in Dep. Vat, Refund = Dep. VAT – VAT for IRD ∴ VAT amount to be deposited to the IRD = 130 + 65 + 65 + 130 = 390 Total amount to be paid by the customer (VSP) = Rs. 3390 72 Allied The Leading Mathematics-9 Tax 73

Arithmetic Arithmetic Tax-exempt Goods/ Services/ Industries in Nepal VAT is a tax imposed on the value added to goods and services consumed in Nepal. The customers will not pay VAT on tax-exempt goods and services and the supplier is not allowed input tax credits on purchases related to the following goods and services: 1. Goods and services of basic needs which include rice, flour, fresh fish, meat, eggs, fruits, flowers, edible oil, piped water, fire wood. 2. Agricultural products such as paddy, wheat, pulses, maize, millet, cereals vegetables etc. are also tax-exempt. 3. The expense of buying goods and services or basic agricultural productssuch aslive animals, agricultural inputs including machinery, manure, fertilizer, seeds, and pesticides. 4. Social welfare services including medicine, medical services, veterinary services and educational services. 5. Educational and cultural goods and services such as books and other printed materials, radio and television transmissions, artistic goods, cultural programmes, non-professional sporting events and admissions to educational and cultural facilities. 6. Personal services such as actors and other entertainers, sportsmen, writers, translators and manpower supplies agents. 7. Purchase and renting of land and buildings 8. Financial and insurance services. 9. Postage and revenue stamps, bank notes, cheque books. 10. Goods made for the use of disabled persons. 11. Air Transport. Points to be Remembered 1. A Value Added Tax (VAT) is a consumption tax assessed on the value added in each production stage of a good or service. It is paid to the government by final consumption. 2. VAT is always takes on the actual selling price including profit, commission, service and other expenses of an article. 3. VAT is free on the basic goods like as education, health, food, exporting goods, etc. 4. VAT is levied at once on the same item. 5. 13% VAT is levied in Nepal. 6. The reducing amount on selling or buying goods by the seller to the buyer is called discount. 7. The original price of the goods is called marked prices (MP) or listed price. 8. The company or shopkeeper gives certain percent on the price of the goods. This is called discount percentage (D%). 9. The price after reducing discount on the marked price of the goods, is called selling price (SP) or actual selling price (ASP) or net price that is paid by the customer. 72 Allied The Leading Mathematics-9 Tax 73

Arithmetic Arithmetic 10. Actual selling price (ASP) = CP ± Profit/Loss or MP – Discount + (Commission, Transportation, taxes other than VAT, wages, insurance, service charge, etc.) 11. Discount amount = D% of MP or MP – ASP/SP 12. Discount percent (D%) = D MP × 100% = MP – SP MP × 100% 13. VAT amount (VAT) = VAT% of ASP or VSP – ASP 14. Selling price with VAT (VSP) = ASP + VAT amount 15. ASP = MP – Discount = MP – D% of MP = MP(1 – D%) = MP 1 – D 100 i.e., ASP = MP(100 – D) 100 Next, Suppose MP → 100, then ASP → 100 – D. So, MP 100 = ASP 100 – D 16. VSP = ASP + VAT amount = ASP + VAT% of ASP = ASP(1 + VAT%) = ASP 1 + VAT 100 i.e., VSP = ASP(100 + VAT) 100 = MP(100 – D)(100 + VAT) 10000 Next, Suppose ASP → 100, then VSP → 100 + VAT. So, ASP 100 = VSP 100 + VAT In short, Suppose MP → 100, then ASP → 100 – D and ASP → 100, then VSP → 100 + VAT So, MP 10000 = VSP (100 – D)(100 + VAT) Example-1 The marked price of a watch is Rs. 5000 at a shop. (a) What is marked price? Define it. (b) What will be the price of the watch if 13% VAT is added when the shopkeeper does not get any discount? Find it. (c) What will be the price of the watch if 13% VAT is added after allowing a discount of 15% on it? (d) In what percent is VAT amount decreased on the watch when the discount is 0% and 15% ? Find. Solution: (a) The initial price of the goods is called marked price. (b) Here, Marked price (MP) = Rs. 5000, Since there is no discount on the watch, so the actual selling price (ASP), MP = Rs. 5000 Now, we have VAT amount = 13% of MP = 0.13 × Rs. 5000 = Rs. 650 ∴ Selling price of the watch with 13% VAT = MP + VAT = Rs. 5000 + Rs. 650 = Rs. 5650. 74 Allied The Leading Mathematics-9 Tax 75

Arithmetic Arithmetic “Alternatively” ∴ Selling price of the watch with 13% VAT = MP + 13% of MP = Rs. 5000 + 13 100 × Rs. 5000 = Rs. 5000 + Rs. 650 = Rs. 5650. “Next Method” ∴ Selling price with VAT = (100% + 13%) of MP = 113% × Rs. 5000 = 1.13 × Rs. 5000 = Rs. 5650. (c) Here, Marked price (MP) = Rs. 5000, Discount (D%) = 15% ∴ Discount amount (D) = 15% of MP = 15 100 × Rs. 5000 = Rs. 750. Actual selling price (ASP) = MP – D = Rs. 5000 – Rs. 750 = Rs. 4250. VAT amount = 13% of Rs. 4250 = 13 100 × Rs. 4250 = Rs. 552.50. Selling price including VAT (VSP) = Rs. 4250 + Rs. 552.50 = Rs. 4802.50. “Alternatively for direct formula method” (b) VSP with 13% VAT and no discount = MP (100 + VAT) 100 = 5000 (100 + 13) 100 = 5000 × 113 100 = Rs. 5650. (c) VSP with 13% VAT after 15% discount = MP(100 – D) (100 + VAT) 100 × 100 = 5000(100 – 15) (100 + 13) 100 × 100 = 5000 × 85 × 113 100 × 100 = Rs. 4802.50. “Proportion Method for (c)” D:ASP = 15:(100–15) = 15:85 Sup. D = 15x, ASP = 85x ∴ MP = ASP + D or, 5000 = 85x + 15x => x = 50 Again, ASP:VAT = 100:13 Sup. ASP = 100y, VAT = 13y ∴ 100y = 85x or, 100y = 85 × 50 => y = 42.50 Now, VSP = 100y + 13y = 113y = 113 × 42.50 = 4802.50 D = 15x ASP = 85x MP = 100x = Rs. 5000 ASP = 100y VAT = 13y VSP = 113y Binod's STORES Bagbazaar, Kathmandu Bill No. : 02 Date: 9/24 Name: Samir Pandey Address: Patan, L.P. SN Particulars Amount 1. Watch 5000.00 2. 3. Total 5000.00 Discount (15%) 750.00 Sub Total 4250.00 VAT (13%) 552.50 Grand Total 4802.50 In words: Four thousand eight hundred two rupees and fifty paisa only. ................ Signature Ganga 74 Allied The Leading Mathematics-9 Tax 75

Arithmetic Arithmetic (d) Decreased VAT amount = 650 – 552.50 650 × 100% = 97.50 650 × 100% = 15% Example-2 After slowing 5% discount on marked price of a tap, 10% VAT was charged on it; and its selling price became Rs. 1672. (a) What is discount? Define it. (b) What is the price of the tap before reducing discount and adding VAT? Find. (c) Find the discount given in this deal. (d) What amount would be charged as VAT on the selling tap? Find it. Solution: (a) The reducing amount on selling or buying goods by the seller to the buyer is called discount. (b) Given, Discount percent (D%) = 5%, VAT percent (VAT%) = 10%, Final selling price (VSP) = Rs. 1672, Marked price (MP) = x = ? Now, we have Actual selling price of the tap after discount (ASP) = MP – D% of MP = x – 5% × x = x – 0.05x = 0.95x Selling price VAT of the tap (VSP) = ASP + VAT% of ASP = 0.95x + 10% × 0.95x = 0.95x + 0.1 × 0.95x = 0.95x + 0.095x = 1.045x But, by question, Selling price VAT of the tap (VSP) = Rs. 1672 ∴ 1.045x = Rs. 1672 or, x = Rs. 1672 1.045 = Rs. 1600 (c) Discount amount (D) = D% of MP = 5% × MP = 5 100 × Rs. 1600 = Rs. 80 (d) Actual selling price of the tap (ASP) = MP – D = Rs. 1672 – Rs. 80 = Rs. 1592 ∴ VAT amount (VAT) = VAT% of ASP = 10 100 × 1592 = Rs. 195.20. By direct method for MP MP = VSP × 10000 (100 – D%) (100 + VAT%) = 1672 × 10000 (100 – 5) (100 + 10) = 16720000 95 × 110 = Rs. 1600 76 Allied The Leading Mathematics-9 Tax 77

Arithmetic Arithmetic Example-3 A customer from Mexico buys a mobile at a discount of 13% and pays Rs. 261 equivalent to Mexican peso for 16% VAT. (a) What is VAT ? Define it. (b) Find the marked price of the mobile. (c) Calculate the amount paid by him/her to buy the mobile. Solution: Let the marked price of a mobile be Rs. x. Then, the actual selling price of the mobile, (ASP) = MP(100 – D) 100 = x(100 – 13) 100 = 87x 100 But, by given, VAT% = 16% and VAT amount (VAT) = Rs. 261. ∴ The VAT amount = VAT % of ASP or, 261 = 16 100 × 87x 100 or, x = 2610000 16 × 87 = Rs. 1875. Hence, the marked price of the mobile is Rs. 1875. Again, the payable amount (VSP) = MP(100 – d) (100 + VAT) 100 × 100 = 1875(100 – 13) (100 + 16) 100 × 100 = 1875 × 85 × 116 100 × 100 = Rs. 41892.25. Example-4 A supplier in Birgunj buys a motorbike from India for Rs. 30000. He pays 100% tax at the custom office and Rs. 1500 for transportation. He sells the motorcycle to a dealer in Narayanghat at a profit of Rs. 13000. The dealer pays Rs. 500 for transportation and Rs. 1000 Narayanghat municipality tax and keeps Rs. 5000 profit on it. He sells it to Devkota in Bharatpur. 13% VAT is levied in each transaction. (a) How much amount does the supplier expense for the motorcycle ? Find it. (b) Calculate the final price paid by Devkota. (c) Find the amount of VAT paid in total. Solution: (a) By the question, VAT payable amount for the supplier = Initial price + Custom tax + transportation + profit. = Rs. 30000 + 100% of Rs. 30000 + Rs. 1500 + Rs. 13000 = Rs. 88000 Now, VAT to be paid by the supplier at Birgunj = 13% of Rs. 88000 = 13 100 × Rs. 88000 = Rs. 11440. ∴ The supplier expenses Rs. 88000 + Rs. 11440 = Rs. 99440. 76 Allied The Leading Mathematics-9 Tax 77

Arithmetic Arithmetic (b) Cost price to the dealer in Narayanghat = Rs. 88000 + Rs. 11440 + Rs. 500 + Rs. 1000 = Rs. 100940. VAT to be included in the price by the dealer in Narayanghat = 13% of Rs. (1000 + 500) = 13 1500 × Rs. 1500 = Rs. 195. Price of the motorbike after the inclusion of VAT in Narayanghat = Rs. 100940 + Rs. 195 = Rs. 101135. Price to Devkota after the inclusion of profit = Rs. 101135 + Rs. 5000 = Rs. 106135. VAT to be paid by Devkota = 13% of Rs. 5000 = 13 100 × Rs. 5000 = Rs. 650 ∴ Final price to Devkota = Rs. 106135 + Rs. 650 = Rs. 107435. (c) Total amount paid for VAT = Rs. (11440 + 195 + 650) = Rs. 12285. PRACTICE 2.2 Keeping Skill Sharp 1. (a) What is VAT? (b) What is discount ? (c) What is the discount on D% of MP? (d) Write the formula to calculate the marked price of an article when discount percent and selling price are given. (e) Write the formula to compute the selling price with VAT of an article when its cost price, discount percent and VAT percent are given. (f) What is the formula to calculate the cost price of an article when discount percent, VAT percent and selling price with VAT are given? (g) What is the VAT percent in Nepal? (h) Write the relation among the marked price, VAT amount and selling price of an article. (i) If x, y and z are MP, discount and SP respectively, write the relation between x, y and z. (j) What is the selling price of an article if the marked price of the article is fixed? 2. (a) Find the cost of a TV costing Rs. 21500 after imposing 10.5% VAT on it. (b) A man paid Rs. 35500 for a necklace in which 13% VAT is added. What is the VAT amount? 3. (a) Find the original cost of a palmtop if 12.5% VAT is imposed on it and a payment of Rs. 15750 is made. (b) After allowing 5% discount on the marked price of a radio, its price became Rs. 1672. How much amount was given as the discount? 78 Allied The Leading Mathematics-9 Tax 79

Arithmetic Arithmetic Check Your Performance 4. (i) Observe the marked price of the jacket. (a) Write the full form of VAT. (b) If 10% discount is given on the price of the jacket, what is the discount price on it ? (c) What will be its actual selling price after discount ? Find it. (d) If 13% VAT is added, what amount is paid by a customer for it? Find it. (ii) Observe the price of the TV in a shopping complex. (a) Write the definition of VAT. (b) If 13% VAT is added when the shopkeeper does not get any discount, what amount is paid by a customer for it? Find it. (c) What will be the price of the TV if 13% VAT is added after allowing a discount of 15% on it (d) In what percent is VAT amount decreased on the TV when the discount is 0% and 15% ? Find it. (e) Find discount percentage if the cost of the TV with 13% VAT is Rs. 32092. (iii) A woman paid Rs. 1,35,500 for a necklace in which 13% VAT is added. (a) Find the price of necklace without VAT. (b) What is VAT amount? (c) If the weight of the necklace is 1.5 tola, what is the price of 1 tola of gold with 13% VAT? 5. (i) Sabina buys a mobile set with 10% VAT after allowing 15% discount for Rs. 7480. (a) What is the meaning of VAT% ? (b) What was the actual price of the mobile set after discount ? (c) Find the VAT amount. (d) Find the marked price of the mobile set. (ii) A discount of 15% is allowed in a camera and 13% VAT is added on it. If payment is Rs. 15175.90, find its marked price. Write the answers of the similar questions of the question no. 4. (i). 6. (i) A tourist bought a khukuri with 25% discount and 13% VAT at a shop. When he went back in his country, he got Rs. 1170 at airport. (a) Which amount was Rs. 1170? (b) What was the label price? (c) Find discount amount. Price: Rs. 2000/- Price: Rs. 35500/- 78 Allied The Leading Mathematics-9 Tax 79

Arithmetic Arithmetic (ii) After allowing 20% discount on the marked price and then adding 10% VAT a mobile was sold to a customer. The customer paid Rs. 320 for VAT. (a) Find the marked price. (b) Find the discount amount. (c) If 5% more discount is given to the customer, find the purchase price of the mobile. 7. (i) A video player was sold at a discount of 10% on the marked price. 13% VAT was added to the price and the customer got Rs. 600 as discount. (a) Calculate its marked price. (b) What was the amount paid on VAT? (c) How much amount is paid for it by a customer? (d) Which amount is more discount or VAT? Find the percentage. (ii) A tourist paid Rs. 5610 for a decorative window. Find the marked price of the window if the shopkeeper has given 15% discount and 10% VAT (in Bahrain) was levied on it. Also, find the amount that gets when he goes back his country. 8. (i) After allowing 25% discount on the marked price and adding 13% VAT on a CC TV set, a customer paid Rs. 1365 for VAT. (a) What is the VAT amount at a% on Rs. b of and article? (b) Find the marked price of the CC TV set. (c) Find the discount given to the customer. (ii) After allowing 20% discount on the marked price and then adding 10% VAT a mobile was sold to a customer. The customer paid Rs. 240 for VAT. (a) Find its marked price. (b) Calculate the discount given to the customer. 9. (i) A telephone set has marked Rs. 2100. Including 20% discount and certain percent VAT added the price reached to Rs. 1848. (a) Find the price of the telephone set after discount. (b) Find the rate of VAT levied on it. (c) Find the more or less percent the discount amount than VAT amount. (ii) A wireless router set has marked Rs. 2100. Including 15% discount and certain percent VAT added the price reached to Rs. 2017.05. Write the answer of the similar questions of the question. no. 9. (i). 80 Allied The Leading Mathematics-9 Tax 81

Arithmetic Arithmetic 10. A bill of restaurant is as follows: Momo 2 plates Rs. 80.00 Meat ball 1 plate Rs. 70.00 Coke 2 bottles Rs. 30.00 Chicken fry 1 plate Rs. 75.00 Total Rs. 255 If 10% service charge is imposed on total bill and 13% VAT on the bill including service charge, find; (a) Service charge (b) VAT (c) Total payment to be paid. (d) Total payment with 10% discount. 4. (i) (b) Rs. 200 (c) Rs. 1800 (d) Rs. 2034 (ii) (b) Rs. 40115 (c) Rs. 34097.75 (d) 15% (e) 20% (iii) (a) Rs. 119911 (b) Rs. 15589 (c) Rs. 9033.33 5. (i) (b) Rs. 8000 (c) Rs. 6800 (d) Rs. 884 (ii) (b) Rs. 15800 (c) Rs. 13430 (d) Rs. 1745.90 6. (i) (a) VAT (b) Rs. 12000 (c) Rs. 3000 (ii) (a) Rs. 4000 (b) Rs. 800 (c) Rs. 3300 7. (i) (a) Rs. 6000 (b) Rs. 702 (c) Rs. 6102 (d) VAT, 17% (ii) Rs. 6000, Rs. 510 8. (i) (b) Rs. 14000 (c) Rs. 3500 (ii) (a) Rs. 3000 (b) Rs. 6000 9. (i) (a) Rs. 1680 (b) 10% (c) 150% (ii) (a) Rs. 1785 (b) 13% (c) 35.75% 10. (a) Rs. 25.50 (b) Rs. 36.47 (c) Rs. 316.97 (d) Rs. 285.27 Answers Project Work Go to your nearby shop and collect the purchased VAT bills of 5 items. Then calculate the following for each item and fill the table given below: SN Items Marked Price (MP) Discount Amount (D) Actual Selling Price (ASP) Selling Price with VAT (VSP) Discount Percent (D%) VAT Percent (VAT%) 1. 2. 3. 80 Allied The Leading Mathematics-9 Tax 81

Arithmetic Arithmetic 3.1 Commission At the end of this topic, the students will be able to: ¾ solve the behaviour problems related to commission. Learning Objectives I Introduction Let's discuss the following activities. Activity 1 Price Rs. 2,50,00,000 On Sale 3% Commission for Agent What is the cost of the above plot of land? If 3% of its cost is to be paid to an agent after selling it, how much amount would the land owner get ? A salesman sells the amount of Rs. 50,300 per day. If he gets 5% of the total sales amount in a month, how much money does he get in the month? If his monthly salary is Rs. 25,400, what is his total income? An agent sold Shyam's house for Rs. 2,75,00,000 to John. Shyam gives 5% of the sold money of the house to the agent for selling it. How much amount did the agent get? How much does Shyam get. We studied the solving problems related to PERCENTAGE in the class 8. Now, can you solve the above problems? Try yourselves. For Plot of Land For Salesman For house Cost of the plot of land = .... Rate of paying to agent = .... Amount for agent = ...... Amount for land owner = .... Sales amount in a month = .... Rate of getting on sales = .... Getting sales amount = .... Total income = .... Cost of the plot of land = .... Rate of paying to agent = .... Amount for agent = ...... Amount for Shyam = .... In the discussion above, the amounts paid to others are commission when they provide services for the owners. These amounts to get the agents are called commissions. CHAPTER 3 COMMISSION AND DIVIDEND 82 Allied The Leading Mathematics-9 Commission and Dividend 83

Arithmetic Arithmetic The amount to be paid to the agent or salesman is called commission and the fixed rate to be paid commission is called commission rate. The commission includes in the field of buying-selling of any object, insurance, shares, money exchange, banking services, guiding on travel, filing forms, any profitable services, etc. For our purpose, by commission we simply mean 'the amount paid to the agent or a company at a fixed rate (usually in percentage) for the service provided by the agent or the company'. Commonly, it is expressed in terms of percentage. This amount is related to the total sales of the goods. Points to be Remembered 1. The amount paid to an agent or company at a fixed rate for the service provided of any task by the agent or the company is called commission amount and commission amount is the commission rate (R%) of Total sales amount (T). i.e., Commission amount = Commission rate (R%) of Total sales amount (T) 2. The fixed rate given to be paid commission is called the commission rate and Commission rate = Commission amount Total sales amount × 100%. 3. A person who acts on the behalf of another person or group is called an agent or broker. 4. The amount obtained by selling goods is called sales amount and the amount after giving commission amount on the sales amount is called net sales amount. Therefore, Net sales amount = Total sales amount – Commission amount. 5. The income of a person with his/her salary, commission, tips is called the total income and Total income = Salary + Commission amount. Example-1 An agent sells goods for Rs. 2,60,540. His/Her monthly salary is Rs. 22,500 and gets at 10 1 2 % commission. (a) What is the commission at a% of the sales Rs. b? (b) How much commission does the agent get ? Find it. (c) Find the monthly income of the agent. Solution: (a) The commission at a% of the sales Rs. b is Rs. ab 100. (b) Here, sales amount = Rs. 2,60,540, rate of commission = 101 2 % = 21 2 % Commission amount = 21 2 % of Rs. 2,60,540 = 21 2 × 100 × Rs. 2,60,540 = Rs. 27,356.70. (c) Again, Monthly salary = Rs. 22,500, Commission amount = Rs. 27,356.70 Monthly income = Monthly salary + Commission amount = Rs. 22,500 + Rs. 27,356.70 = Rs. 49,856.70. Hence, the monthly income of the agent is Rs. 49,856.70. 82 Allied The Leading Mathematics-9 Commission and Dividend 83

Arithmetic Arithmetic Example-2 The monthly salary of a salesman of a Food Store is Rs. 18,000. If he sold the foods more than Rs. 5,50,000, he gets 2.5%. He sales the food of Rs. 8,23,000. (a) Define commission. (b) How much commission does he get ? Find it. (c) Find the monthly income of the salesman. Solution: (a) The amount paid to an agent or company at a fixed rate for the service provided of any task by the agent or the company is called commission. (b) Here, sales amount = Rs. 8,23,000, Minimum sales amount = Rs. 5,50,000 ∴ Amount for commission = Rs. 8,23,000 – Rs. 5,50,000 = Rs. Rs. 2,73,000 Rate of commission = 2.5% ∴ Commission amoun = 2.5 % of Rs. 2,73,000 = 0.025 × Rs. 2,73,000 = Rs. 6,825. (c) Again, Monthly salary = Rs. 18,000, Commission amount = Rs. 6,825 ∴ Monthly income = Monthly salary + Commission amount = Rs. 18,000 + Rs. 6,825 = Rs. 24,825. Hence, the monthly income of the salesman is Rs. 24,825. Example-3 A land worth Rs. 25,25,000 is sold by the brokers A and B. Broker A takes 2.5% and broker B takes 3% commission on the sold amount. (a) Define commission amount. (b) How much commission do the brokers A and B take from the land owner ? (c) Find the net amount received by land owner. (d) Who gets more commission between P and Q and by how much percentage? Solution: (a) The payment associated with either a fixed payment or percentage of a sale for the service provided of any task by the agent or the company is called commission. (b) Here, Price of the land = Rs. 25,25,000 Rate of commission for broker A = 2.5% ∴ Amount of commission for broker A = 2.5% of Rs. 2525000 = Rs. 63,125 Rate of commission for broker B = 3% ∴ Amount of commission for broker B = 3% of 2525000 = Rs. 75,750 (c) Total commission amount = 63,125 + 75,750 = Rs. 1,38,875 ∴ Net amount received by land owner = Rs. 25,25,000 – Rs. 1,38,875 = Rs. 23,86,125. (d) Commission for brokerA= Rs.63,125 and commission for broker B = Rs.75,750 Hence, the broker B gets more commission than the broker A. 84 Allied The Leading Mathematics-9 Commission and Dividend 85

Arithmetic Arithmetic ∴ More percentage of commission receipt by the broker B than the broker A = More commission receipt by the broker B Commission receipt by the broker A × 100% = Rs. 75,750 - Rs. 63,125 Rs. 63,125 × 100% = Rs. 712,625 Rs. 63,125 × 100% = 20% Example-4 A sales-girl gets 5% commissions on the total sales of amount Rs. 425000. She gets extra 8% successive commissions in the end of the month. (a) Define monthly income. (b) How much total commission does she get ? Find it. (c) If her monthly salary is Rs. 18000 then, find her monthly income. Solution: (a) The gross monthly wages including salary, commissions, overtime pays, tips, profits etc. is called monthly income. (b) Here, Total sales amount in a month = Rs. 4,25,000 Successive commission rates = 5% and 8% Monthly salary of sales-girl = Rs. 18,000 Now, we know that, Commission amount 1st time @ 5% = 5% of Rs. 4,25,000 = Rs. 21,250 ∴ Sales amount after 1st commission = Rs. 4,25,0000 – Rs. 21,250 = Rs. 4,03,750 ∴ Commission 2nd time @ 8% = 8% of Rs. 4,03,750 = Rs. 32,300 ∴ Total commission amount = Rs. 21,250 + Rs. 32,300 = Rs. 53,550 (c) The monthly income of the sales-girl = Salary + Commission amount = Rs. 18,000 + Rs. 53,550 = Rs. 71550. Example-5 A staff of the Royal State Company has monthly salary Rs. 6,000. He works on the field of transaction of land and gets some commission from it. He gets Rs. 34,000 at the last of the month by selling the land of Rs. 5,60,00,000. (a) Define the rate of commission. (b) How much commission did the staff take ? Find it. (c) Find the commission rate. Solution: (a) The percentage or fixed payment associated with a certain amount of sales is called commission rate. (b) Here, Salary of a staff of the Royal State Company = Rs. 6,000 His/Her monthly income = Rs. 34,000 ∴ Commission amount = monthly income – Salary = Rs. 34,000 – Rs. 6000 = Rs. 28,000 (c) Again, Total sales amount = Rs. 5,60,00,000 Commission rate = Commission amount Total sales amount × 100% = Rs. 28,000 5,60,00,000 × 100% = 0.05% 84 Allied The Leading Mathematics-9 Commission and Dividend 85

Arithmetic Arithmetic Example-6 There are 10 staffs in a motorcycle showroom and each staff gets the monthly salary Rs. 19,000. They get commission of the monthly total sales at the rate of 0.5%. If they sale the motorcycles of Rs. 2,25,00,000 in the month of Kartik, (a) How much amount does the motorcycle showroom pay as commission for the staffs ? (b) Find the monthly income of each staff. (c) Which is more among salary or commission in their monthly income and by how much percentage ? Solution: (a) The motorcycle showroom pays Rs. 2,25,00,000 × 0.5% = Rs. 1,12,500 as commission for the staffs. (b) Here, Commission for 10 staffs = Rs. 1,12,500 ∴ Commission for each staff = Rs. 1,12,500 10 = Rs. 11,250 Salary of each staff = Rs. Rs. 19,000 ∴ Monthly income of each staff = Monthly salary + Commission amount = Rs. 19,000 + Rs. 11,250 = Rs. 30,250. Hence, the monthly income of the salesman is Rs. 24,825. (c) Here, the salary (Rs. 19,000) is more than the commission (Rs. 11,250). ∴ More amount in salary = Rs. 19,000 – Rs. 11,250 = Rs. 7,750 ∴ More percentage in salary than commission = More salary Commission × 100% = Rs. 7,750 Rs. 11,250 × 100% = Rs. 68.89% Example-7 A departmental store pays commission on monthly basis on the sale of items in the following scheme. (i) 2.5% on the sales up to Rs. 50,000. (ii) 3.5% additional commission on the sales of Rs. 50,000 above up to Rs.75,000. (iii) 5% additional commission on the sales of Rs. 75,000 above up to Rs. 1,00,000. (iii) 6% additional commission on above Rs. 1,00,000. (a) Write formula of the rate of commission. (b) Find the total commission amount if a salesman sells items worthing Rs. 1,82,000 within a month. (c) Find the income of a salesman with his salary Rs. 15,000. Solution: (a) Commission rate = Commission amount Total sales amount × 100% (b) Here, arranging the sales amount Rs. 1,82,000 as, Rs. 1,82,000 = Rs.(50,000 + 25,000 + 25,000 + 82,000) Now, Commission on first Rs. 50,000 = 2.5% of Rs. 50,000 = 2.5 100 × Rs. 50,000 = Rs. 1,250. Commission on second Rs. 25,000 = 3.5% of Rs. 25,000 = 3.5 100 × Rs. 25,000 = Rs. 875. 86 Allied The Leading Mathematics-9 Commission and Dividend 87

Arithmetic Arithmetic Commission on the last Rs. 25,000 = 5% of Rs. 1,250 = 5 100 × Rs. 7000 = Rs. 350. Commission on the last Rs. 82,000 = 6% of Rs. 82,000 = 6 100 × Rs. 82,000 = Rs. 4,920. ∴ Total commission amount = Rs. 1,250 +Rs. 875 +Rs. 1,250 +Rs. 4,920 = Rs. 8,295. "Alternatively" Total commission amount = 2.5% of Rs. 50,000 + 3.5% of Rs. 25,000 + 5% of Rs. 1,250 + 6% of Rs. 82,000 = Rs. 1,250 + Rs. 875 + Rs. 1,250 + Rs. 4,920 = Rs. 8,295. (c) ∴ The income of the salesman = Salary + Total commission amount = Rs. 12,000 + Rs. 8,295 = Rs. 20,295. Example-8 A salesman sales the following items in a month and gets the indicated commission rate. SN Particulars Quantity Rate Amount Commission rate 1. Pants 25 pcs Rs. 750 ---- 8% 2. Shirts 30 pcs Rs. 525 ---- 13% 3. Shoe 15 pairs Rs. 675 ---- 15.5% 4. T-shirts 25 pcs Rs. 360 ---- 10.5% (a) In which price does commission take ? (b) Find the total commission amount taken by the salesman. (c) If the monthly salary of the salesman is Rs. 25,000, calculate his monthly income. Solution: (a) Commission taken on the total sales amount. (b) Here, by the question, first, complete the given table with adding commission amounts as follows; SN Particulars Quantity Rate Amount Commission rate Commission amount 1. Pants 25 pcs Rs. 750 Rs. 18,750 8% Rs. 1,500 2. Shirts 30 pcs Rs. 525 Rs. 15,750 13% Rs. 2,047.50 3. Shoe 15 pairs Rs. 675 Rs. 10,120 15.5% Rs. 1,568.60 4. T-shirts 25 pcs Rs. 360 Rs. 9,000 10.5% Rs. 945 Total commission amount Rs. 6,061.10 (b) Monthly salary of the salesman = Rs. 25,000 ∴ Monthly income of the salesman = Salary + Total commission amount = Rs. 25,000 + Rs. 6,061.10 = Rs. 31,061.10 86 Allied The Leading Mathematics-9 Commission and Dividend 87

Arithmetic Arithmetic PRACTICE 3.1 Read Think Understand Do Keeping Skill Sharp 1. (a) Define commission. (b) Write down the formula to find the commission amount on the selling of the goods when sales amount and rate of commission are given. 2. (a) If a salesman sells the goods of Rs. 7500000, how much commission does he get at 5.5% ? (b) If a man gets Rs. 1405 as commission by selling a laptop set for Rs. 56200, find the commission rate. 3. (a) An agent gets a commission of Rs.2500 on the sales of Rs. 15200. How much will the owner get from the sales ? (b) A girl receives monthly salary of Rs. 25200 and commission of Rs. 9215 on the total sales for a month. What will her gross amount be? (c) A seller got Rs. 35000 while selling a laptop through the agent. If a buyer paid Rs. 37200 for the laptop, how much did the agent receive ? Check Your Performance Answer the following questions for the given situations (i) and (ii). 4. (i) An agent receives the salary Rs. 25500 with 5% commission in a month. S/he sells the goods for Rs. 435000 in the month. (ii) An agent's monthly salary is Rs. 12000. S/he gets 5% commission on the total sales. If the sales amount of the last month is Rs. 200000. (a) What is the commission rate ? Define it. (b) How much commission does the agent get ? Find it. (c) Find the monthly income of the agent. 5. (i) The monthly salary of a girl of a Shopping Complex is Rs. 20,000. If she sold the foods more than Rs. 10,00,000, she gets 2%. She sales the food of Rs. 15,25,000. (ii) The monthly salary of a girl of a Shopping Complex is Rs. 20,000. If she sold the foods more than Rs. 6,50,000,she gets 4% commission of the sales of the food of Rs. 11,35,500. (a) How much percent did the girl get the commission rate when she gets Rs. p as commission on the selling amount Rs. q ? (b) How much commission did the girl get ? Find it. (c) Find the monthly income of the girl. 6. (i) A residential land worth Rs. 1,50,50,000 is sold by two agents P and Q in two stages. The agent P takes 3.5% and the agent Q takes 4% commission on the sold amount. 88 Allied The Leading Mathematics-9 Commission and Dividend 89

Arithmetic Arithmetic (ii) A residential house is sold for Rs. 2,30,00,000 through the medium of two agents P and Q in two stages.The agent Pand Q take 2% and 2.5% commission on the sold amountrespectively. (a) What is the commission amount ? Define it. (b) How much commission do the agents P and Q take from the land owner ? (c) Find the net amount received by the owner. (d) Who gets less or more commission between the agents P and Q and by how much percentage? 7. (i) A sales-girl of the monthly Rs. 15,300 salary gets 4% commission and 6% successive commissions on the total sales amount Rs. 4,25,000 in a month. (ii) Awoman of monthly salary Rs. 23,600 sellsthe goods of Rs. 6,75,000 in a month. She gets 4% commission and 6% successive commission on the total sales amount in each month. (a) Define the monthly income. (b) How much total commission does she get? (c) Find her monthly income. 8. (i) A staff of Suman Lekhpadhi Office whose monthly salary is Rs. 12,000. He also works on the field of transaction of land and gets some commission from it. He gets Rs. 44,500 at the last of the month by selling the land of Rs. 3,25,00,000. (ii) The monthly salary of a staff of Nepal Marriage Bureau is Rs. 24,200 and s/he earns the amount of Rs. 3,80,500 for the office in a month and gets some commission from it. He gets Rs. 31,810 at the last of the month. (a) What is commission rate ? Define it. (b) How much commission did s/he take ? Find it. (c) Find the commission rate. 9. (i) There are 8 staffs in a shopping center and each staff gets the monthly salary Rs. 21,000. They get commission of the monthly total sales at the rate of 0.5%. If they sell the goods of Rs. 3,21,50,000 in the month of Asoj. (ii) 12 staffs of a car center get commission of the monthly total sales at the rate of 0.25%. They sell the cars of Rs. 6,75,45,000 in the month. The monthly salary of each staff is Rs. 21,000. (a) How much amount does the center pay as commission for the staffs ? (b) Find the monthly income of each staff. (c) Which is more amount salary or commission in their monthly income and by how much percentage ? 10. (i) A departmental store pays commission on weekly basis to its salesmen on the basis of items sold throughout the week in the following rates: * 1% on the sales between Rs. 0 – Rs. 50,000. * 2% additional commission on the sales between Rs. 50,000 – Rs. 1,00,000. * 4% on the sales more than Rs. 1,00,000. Asales-marketing officer of the monthly salary Rs. 12,550 sold the itemsfor Rs. 2,35,000. 88 Allied The Leading Mathematics-9 Commission and Dividend 89

Arithmetic Arithmetic (ii) A shopping mall gives commission on the selling of the items as in the following: * 1.5% on the sales less than Rs. 1,00,000. * 2.5% on the sales between Rs. 1,00,000 – Rs. 3,00,000. * 3% additional commission on the sales between Rs. 3,00,000 – Rs. 5,00,000. * 4% on the sales more than Rs. 5,00,000. A sales officer of the monthly salary Rs. 11,650 sold the items for Rs. 7,25,520. (a) Write formula of the rate of commission. (b) Find the total commission amount of the officer. (c) Find the total income of the officer. 11. (i) A salesman sales the following items in a month and gets the indicated commission rate. SN Particulars Quantity Rate Amount Commission rate 1. Jackets 12 pcs Rs. 2550 ---- 12% 2. Trousers 15 pcs Rs. 1525 ---- 10% 3. Caps 40 pcs Rs. 375 ---- 8.5% 4. Shoes 18 pairs Rs. 850 ---- 9.25% The monthly salary of the salesman is Rs. 12850. (ii) A salesman sells the following items in a month and gets the indicated commission rate. SN Particulars Quantity Rate Amount Commission rate 1. Biscuits 50 pa Rs. 30 ---- 9.5% 2. Rice 8 sacks Rs. 1800 ---- 10.25% 3. Dal 35 kg Rs. 80 ---- 14% 4. Potatoes 65 kg Rs. 75 ---- 12% 5. Tomatoes 25 kg Rs. 60 ---- 8.5% The monthly salary of the salesman is Rs. 28500. (a) In which price does commission take ? (b) Find the total commission amount taken by the salesman. (c) Calculate his monthly income. 2. (a) Rs. 41250 (b) 2.5% 3.(a) Rs. 12700 (b) Rs. 34415 (c) Rs. 2200 4. (i) (b) Rs. 21750 (c) Rs. 47250 (ii) (b) Rs. 10000 (c) Rs. 22000 5. (i) (b) Rs. 10500 (c) Rs. 30500 (ii) (b) Rs. 19420 (c) 39420 6. (i) (b) Rs. 526750, Rs. 60200 (c) Rs. 13921250 7. (i) (b) Rs 41480 (c) Rs. 56780 8. (i) (b) Rs 32500 (c) 0.1% (ii) (b) Rs 7600 (c) 2% 9. (i) (a) Rs. 16076 (b) Rs. 37075 (c) Monthly salary, 30.64% (ii) (a) Rs. 168862.50 (b) Rs. 14071.88 (c) 49.23% 10. (i) (b) Rs. 6900 (c) Rs. 19450 (ii) (b) Rs. 21520.80 (c) Rs. 33170.80 11. (i) (b) Rs. 1415.25 (c) Rs. 21499.75 (ii) (b) Rs. 127.50 (c) Rs. 31223 Answers 90 Allied The Leading Mathematics-9 Commission and Dividend 91

Arithmetic Arithmetic 3.2 Dividend and Bonus At the end of this topic, the students will be able to: ¾ solve the behaviour problems related to dividend. Learning Objectives I Introduction Dividend and Bonus Let's discuss the following activities that we listen or see in News in TV, radio or social medias. Activity 1 Nepal Telecom Limited has been distributed cash of Rs. 125 and Rs. 1,45,250 for each of its all shareholders and all staffs from its profit of the fiscal year 2078/079 respectively. Standard Chartered Bank Nepal Limited (SCB) has been announced 17.50% of the net profit of earned amount in the FY 2078/79 to its all shareholders and staffs. Chilime Hydro Power Company Limited (CHCL) has distributed 20% more shares to its shareholders directly to their Demat account and gives 350% cash bonus to its all staffs in the fiscal year 2078/79. What are share and shareholder ? What are dividend and bonus ? A share is a single unit of investment or ownership in a financial asset (firm, small capital invested business or company, large capital invested business). The value of a share that a farm or company issues depends on its face value. The value of each share is the capital of a company divided by the total number of shares. A person, group, or organization that owns one or more shares in a company, is known as a shareholder or investor. When a company gets a profit or surplus, some of it can re-invest in the business or company and some of it to its employees beyond salary is paid. It is the rewardness distribution for employees. The extra cash amount or number of shares taken from the net profit or surplus of the companies by the shareholders or investors is called dividend and the financial reward amount get from the certain percent of the net profit of the company by the all staffs is called bonus. It is legal for a company to have only one shareholder. Both dividend and bonus are surplus rewardnesss amount or share distributed to shareholder or investor and staff. Bonus share is an additional share given to all the shareholders without any additional cost based upon the number of shares. It is the company's accumulated earnings which are not given out in the form of dividends, but are converted into free shares. 90 Allied The Leading Mathematics-9 Commission and Dividend 91

Arithmetic Arithmetic In financial history of the world, the Dutch East India Company (VOC) was the first recorded (public) company ever to pay regular dividends. The VOC paid annual dividends worth around 18 percent of the value of the shares for almost 200 years of existence (1602-1800). Historically, early European traders in India used to make some ex-gratia payments because they were satisfied with their large profits in the industries due to World War I. At first, the certain textile mills granted 10% of wages as war bonusto their workers in 1917. This practice came to an end after the war when the boom came to an end due to which the workers resorted to strikes. To resolve these, the government appointed the Bonus Dispute Committee in 1924 and established the claim for Bonus not as a legal right but as an ex-gratia payment to the workers. when the profits are huge. In 1950, the Full Bench of the Labour Appellate evolved a formula for determination of bonus. A plea was made to raise that formula in 1959. In Nepal, bonus was introduced as First Bonus Act at 2030 (1974) and revised Bonus First Amendment Act in 2034 BS (1977 AD). Activity 2 The dividend is allocated as a fixed amount per share of shareholders dividing in proportion to their shareholding. Dividend is paid annually in certain rate determined by the board of director or the management of the firm or company. For example; A commercial bank earned Rs. 25,50,00,000 in a year and its board committee decided to distribute 21% dividend to its 25,00,000 shareholders and 30% bonus to its 210 staffs. If Mr. Sansar was invested 750 shares of Rs. 100, how much dividend does he get and how much bonus each staff get? Calculation of Dividend of Mr. Sansar; Total profit of a bank = Rs. 25,50,00,000 ∴ Total dividend amount = 21% of Rs. 25,50,00,000 = 21 100 × Rs. 25,50,00,000 = Rs. 5,35,50,000 No. of total shares = 25,00,000 ∴ Dividend for 1 share = Rs. 5,35,50,000 25,00,000 = Rs. 321.42 No. of shares with Mr. Sansar = 750 ∴ Dividend received by Mr. Sansar = Rs. 21.42 × 750 = Rs. 16,065. Hence, Mr. Sansar gets Rs. 16,065 as dividend. Indians in World War I at 1917 92 Allied The Leading Mathematics-9 Commission and Dividend 93

Arithmetic Arithmetic Calculation of Bonus for each staff; Total profit of a bank = Rs. 25,50,00,000 ∴ Total bonus amount = 30% of Rs. 25,50,00,000 = 30 100 × Rs. 25,50,00,000 = Rs. 7,65,00,000 No. of total staffs = 210 ∴ Bonus for each staff = Rs. 7,65,00,000 210 = Rs. 3,64,285.71 Hence, each staff gets Rs. 3,64,285.71 as bonus. Important Formulae on Dividend and Bonus Total dividend/bonus amount = Rate of dividend/bonus × Total net profit = No. of employees or shares × Dividend/bonus amount per employee or share Dividend/bonus amount per employee = Total dividend/bonus amount No. of shares/employees Rate of dividend/bonus = Total dividend/bonus amount Total net profit × 100% Total capital of company or institution = No. of shares × Value of each share Cost of a share = Total dividend amount Total shares , No. of shares = Amount of investment Market value per share Received dividend = Cost of a share × No. of shares Points to be Remembered 1. Dividend: The extra cash amount or number of shares taken from the net profit or surplus of the companies by the shareholders or investors is called dividend. 2. Bonus: The extra payment amount from the certain percent of the net profit of a company to its employees or service holders or shareholders is called dividend or bonus. 3. Share: A share is a single unit of investment or ownership in a company or financial asset. The value of a share that a company issues depends on its face value. The value of each share is the capital of a company divided by the total number of shares. 4. Shareholder: A person, group, or organization that owns one or more shares in a company, is called a shareholder. It is legal for a company to have only one shareholder. 5. Bonus share: A additional shares given to all the shareholders without any additional cost based upon the number of shares are called bonus shares. 6. Net Profit: The profit amount made by excluding all types of expenses is called the net profit. The profit can be equally distributed among the shareholders of the company on the basis of the number of shares. 92 Allied The Leading Mathematics-9 Commission and Dividend 93

Arithmetic Arithmetic Example-1 A private institute makes a profit of Rs. 5,30,000 per month. At the end of the year, the institute owner distributes 12.50% of the profit as a bonus to its 48 employees. (a) From which amount does a bonus distribute? (b) Find the total bonus amount. (c) Find the bonus amount received by each employee. Solution: (a) A bonus amount is distributed from the profit of the company or institute. (b) Here, monthly profit of a private institute = Rs. 5,30,000 Yearly profit of the private institute = Rs. 5,30,000 × 12 = Rs. 63,60,000 Yearly rate of bonus = 12.50% ∴ Total bonus amount = 12.50% of Rs. 63,60,000 = 12.50 100 × Rs. 63,60,000 = Rs. 7,95,000 (c) Again, Number of employees = 48 ∴The bonus amountreceived by each employee is Rs. 7,95,000 48 =Rs.16,562.50. Example-2 A team of boys opens the agriculture farms A and B. They employ 14 workers for the farm A and 20 workers in the farm B. (a) What is bonus ? Define it. (b) If they earn net profit of Rs. 15,50,000 from the farm A in a year and they distribute Rs. 15,500 as bonus to each worker, how much percent of bonus do they distribute ? Find it. (c) If they earn net profit of Rs. 25,75,000 from the farm B in the same year and they distribute the bonus as same rate as the farm A, how much does each worker get from the farm B ? Find it. Solution: (a) An amount distributed from the profit of the company or institute to its employees is called bonus. (b) Here, yearly net profit of the farm A = Rs. 15,50,000 Bonus amount distributed to 1 worker = Rs. 15,500 ∴ Total bonus amount distributed to 14 workers = Rs. 15,500×14 = Rs. 21,7000 ∴ Rate of bonus = Total bonus amount Yearly net profit ×100% = Rs. 21,700 Rs. 15,50,000 ×100% = 14% Hence, they distribute 14% bonus to their 14 workers. (c) Again, yearly net profit of the farm B = Rs. 25,75,000 Rate of bonus = As the same rate in the farm A = 14% ∴ Total bonus amount distributed to 20 workers = 14% of Rs. 25,75,000 = 0.14 × Rs. 25,75,000 = Rs. 3,06,500 94 Allied The Leading Mathematics-9 Commission and Dividend 95

Arithmetic Arithmetic ∴ Bonus amount distributed to each workerin the farmB= Total bonus amount No. of workers = Rs. 3,06,500 20 = Rs. 18,025 Example-3 The net profit of a company is Rs. 5,25,75,000 in a year. The bonus is distributed to its employees at the different rates on the basis of monthly salary of a employee as shown below. Level Monthly salary scale No. of employees Rate of bonus A Rs. 40,000 - Rs. 50,000 2 8% B Rs. 30,000 - Rs. 40,000 4 10% C Rs. 20,000 - Rs. 30,000 6 15% (a) What is the rate of bonus? Define it. (b) How much total bonus amount does it distribute to its employees ? Find it. (c) Find the bonus amount received by the employee whose salary is Rs. 45,640. Solution: (a) A fixed bonus amount taken on the basis of Rs. 100 is called the rate of bonus. (b) Here, net profit in a year = Rs. 5,25,75,000 Rate of bonus for all employees = 8% + 10% + 15% = 33% ∴ Total bonus amount = 33% of Rs. 5,25,75,000 = 0.33 × Rs. 5,25,75,000 = Rs. 1,73,49,750 (c) The employee whose salary is Rs. 45,640, contains in the level A. Rate of bonus for level A = 8% ∴ Bonus amount for 2 employees of the level A = 8% of Rs. 5,25,75,000 = 0.08 × Rs. 5,25,75,000 = Rs. 42,06,000 ∴ Bonus amount for 1 employee of the levelA= Rs. 42,06,000 2 = Rs. 21,03,000. Hence, the bonus amount received by the employee whose salary is Rs. 45,640, is Rs. 21,03,000. Example-4 The net profit of a company is Rs. 1,45,50,00, in a year. The bonus is distributed at 18% equally among certain number of workers and each gets Rs. 52,380. (a) What is the bonus amount of the net profit Rs. p at 25% ? Write. (b) Find the bonus amount getting by all the workers of the company. (c) Find the number of workers working in the company. Solution: (a) The bonus amount of the net profit Rs. p at q% is Rs. pq 100. (b) Here, net profit in a year = Rs. 1,45,50,000 94 Allied The Leading Mathematics-9 Commission and Dividend 95

Arithmetic Arithmetic Rate of bonus = 18% ∴ Total bonus amount = 18% of Rs. 1,45,50,000 = 0.18 × Rs. 1,45,50,000 = Rs. 26,19,000 (c) Again, bonus amount received by each worker = Rs. 52,380 We have Number of employees × Bonus for each worker = Total bonus amount or, Number of workers = Total bonus amount Bonus for each worker = Rs. 26,19,000 Rs. 52,380 = 50 Example-5 A company distributed Rs. 18,100 as a bonus to each of 25 employees at the rate of 25% of the total profit. (a) What is the net profit of the company? (b) How much bonus did it distribute to all employees ? Find it. (c) Find the net profit of the company. Solution: (a) The income by reducing all expenses such as salary, wages, official documents, taxes, dearness allowance, vehicle charge and repair, etc. of a company is called net profit. (b) Given, bonus amount for 1 employee = Rs.4,52,500 ∴ Total bonus amount for 25 employees = Rs.4,52,500 × 25 = Rs. 4,52,500 Hence, the company distributed Rs. 4,52,500 as bonus to all employees. (c) Again, Total bonus amount = Rs.4,52,500, Rate of bonus = 25%, Net profit = ? Now, we have Total bonus amount = Bonus rate of Net profit or, Rs. 4,52,500 = 25% × Net profit or, Rs. 4,52,500 = 25 100 × Net profit or, Rs. 4,52,500 × 100 25 = Net profit or, Net profit of the company = Rs. 18,10,000 Example-6 There are 20,000 shares at the rate of Rs. 100 in Sanjeewani Co-operative. Amar has 840 shares in that co-operative. The co-operative earned Rs. 15,50,000 in a year and decided to distribute 15% cash dividend of total profit to the shareholders. (a) What is dividend ? Define it. (b) How much cash dividend did Amar get? Find it. (c) How much profit percent did he get? Find it. Solution: (a) A dividend is a distribution of the total profit of a company to its shareholders or investors. (b) Here, Total profit = Rs. 15,50,000, Rate of dividend = 15% 96 Allied The Leading Mathematics-9 Commission and Dividend 97

Arithmetic Arithmetic ∴ Dividend amount = 15% of Total profit = 15 100 × Rs. 15,50,000 = Rs. 2,32,500 Total No. of shares = 20,000 ∴ Amount of dividend per share = Rs. 2,32,500 20,000 = Rs. 11.625 No. of shares with Amar = 840 ∴ Amount of dividend received by Amar = Rs. 11.625 × 840 = Rs. 9,765 (c) Initial price of share = Rs. 100 × 840 = Rs. 84,000 ∴ Profit percent on invest = Rs. 9,765 Rs. 84,000 × 100% = 11.625% Example-7 Chilime Hydro-power Company sold 80,000 shares. The company made a net profit of Rs. 12,45,00,000 in a year and distributed a certain percent of profit as dividend. A shareholder, who has bought 250 shares, received Rs. 31,125 dividend. (a) Define rate of dividend. (b) Find the total dividend amount. (c) Find the rate of dividend. Solution: (a) A financial ratio that shows how much a company pays out in dividends each year relative to its stock price or net profit amount, is called the rate of dividend. (b) Here, Total number of shares in Chilime Hydro-power Company = 80000 Dividend of 250 shares = Rs. 31,125 ∴ Dividend of 1 shares = Rs. 31,125 250 or, Dividend of 80,000 shares = Rs. 31,125 250 × 80000 = Rs. 99,60,000 ∴ Total dividend amount = Rs. 99,60,000 (c) Total profit = Rs. 12,45,00,000 ∴ Rate of dividend = Total dividend amount Total profit × 100% = Rs. 99,60,000 Rs. 12,45,00,000 × 100% = 8% Example-8 A brick factory earned a gross amount to Rs. 32,00,000 in a year increasing its income from 10% to 25% and the factory distributed bonus at the rate of 7.5% to its 300 workers. (a) Why is bonus different from dividend of a company? Give reason. (b) Find the amount of bonus received by each worker. (c) If the workers demanded Rs. 200 more bonus, what percentage increase will be there in the given rate of bonus ? Solution: (a) Bonus different from dividend of a company because bonus is distributed for employees but dividend is distributed for shares. 96 Allied The Leading Mathematics-9 Commission and Dividend 97

Arithmetic Arithmetic (b) Here, Total profit = Rs. 32,00,000, Rate of bonus = Rs. 7.5% ∴ Total bonus amount = 7.5% of Rs. 32,00,000 = 0.075 × Rs. 32,00,000 = Rs. 2,40,000 ∴ Bonus received by each worker = Rs. 2,40,000 300 = Rs. 800. (c) Additional amount claimed for bonus = Rs. 200. Total additional amount claimed = 300 × Rs. 200 = Rs. 60,000. ∴ Total bonus including additional bonus = Rs. 2,40,000 + Rs. 60,000 = Rs.3,00,000. ∴ Percentage of bonus to be distributed = Rs. 3,00,000 Rs. 32,00,000 × 100% = 9.375% ∴ Percentage increase at the rate of bonus = (9.375 - 7.5)% = 1.875%. PRACTICE 3.2 Read Think Understand Do Keeping Skill Sharp 1. (a) Write the formula to calculate the total dividend amount when the number of employees and the dividend amount per employee are given. (b) Write the formula to find the dividend amount per share. (c) Write the definition of dividend or bonus. 2. (a) If a bank distributes 23% of the total profit Rs. 5,75,000 as dividend, what is its total dividend amount ? (b) The yearly profit of a company is Rs. 4,45,00,000. If it distributes 17% of the total profit as dividend, what is its total dividend amount ? (c) There are 45,46,000 shares of a hydro-power company. If it distributes Rs. 65 per share as bonus, how much amount is distributed as the bonus by the bank ? (d) A hydro-power has 945500 shares of Rs. 100 each. What is its total capital ? Check Your Performance 3. (i) An agriculture company made a profit of Rs. 2,50,80,000 in a year and distributed 25.50% of the profit as bonus to its 125 employees. (a) Define bonus. (b) Find the total bonus amount. (c) How much bonus will each employee get? Find it. 98 Allied The Leading Mathematics-9 Commission and Dividend 99

Arithmetic Arithmetic (ii) A bank makes a net profit of Rs. 35,50,000 in a month. At the end of the year, it distributes 20% of the total profit as dividend among its 2,000 shareholders. Find the dividend amount received by each shareholder. (a) Define dividend. (b) Find the total dividend amount. (c) How much dividend will each shareholder get? Find it. 4. (i) A businessman invests in two companies P and Q. He employs 20 workers in the company P and 28 in the company Q. (a) What is rate of bonus ? Define it. (b) If he earns the net profit of Rs. 2,25,00,000 from the company P in a year and distributes Rs. 2,58,750 as bonus to each worker, how much percent of bonus does he distribute? Find it. (c) If he earns the net profit of Rs. 1,45,65,000 from the company Q in the same year and distributes the bonus as same rate as the company P, how much does each worker get from the company Q ? Find it. 5. (i) The net profit of a company is Rs. 4,75,50,000 in a year. The bonus is distributed to its employees at the different rates on the basis of monthly salary of a employee as shown in the table. Level Monthly salary scale No. of employees Rate of bonus A Rs. 30,000 - Rs. 40,000 3 9% B Rs. 20,000 - Rs. 30,000 6 12% C Rs. 10,000 - Rs. 20,000 8 15% (a) Write the formula to find the bonus when total net profit and bonus rate are given. (b) How much total bonus amount does it distribute to its employees ? Find it. (c) Find the bonus amount received by the employee whose salary is Rs. 29,550. (ii) The net profit of a company is Rs. 5,25,75,000 in a year. The bonus is distributed to its employees at the different rates on the basis of monthly salary as shown in below. (a) What is rate of bonus? Define it. (b) Find the bonus amount received by the employee whose salary is Rs. 22,500. (c) Find the bonus amount received by the employee whose salary is Rs. 44,640 6. (i) The net profit of a company is Rs. 2,35,00,00 in a year. The bonus is distributed at 25% equally among certain number of employees and each gets Rs. 1,25,000. (a) What is the bonus amount of the net profit Rs. a at b% ? Write. (b) Find the bonus amount got by all the employees of the company. (c) Find the number of employees working in the company. Monthly salary scale Rate of bonus Rs.15,000 - Rs. 25,000 2% Rs.25,000 - Rs. 35,000 1.5% Rs.35,000 - Rs. 45,000 1% 98 Allied The Leading Mathematics-9 Commission and Dividend 99

Arithmetic Arithmetic (ii) A company makes a profit Rs. 1250000 in a month. At the end of year, the company owner distributes 7.5% of the total profit as a bonus among all the staffs and each of them receives Rs. 45000. (a) What is the bonus amount of the net profit Rs. a at b% ? Write it. (b) Find the bonus amount getting by the all staffs of the company. (c) Find the number of staffs working in the company. 7. (i) A company distributed Rs. 1,32,000 as a bonus to each of 40 employees at the rate of 22% of the total profit. (a) What is the net profit of a company? (b) How much bonus did it distribute to all the employees ? Find it. (c) Find the net profit of the company. (ii) A bank distributed Rs. 5,30,500 as a bonus to its 50 employees, which is 25% of the total profit. (a) Write any one difference between income and profit. (b) How much bonus did it distribute to each employee ? Find it. (c) Find the net profit of the company. 8. (i) A hydro-power company has 45,000 shares of Rs. 100 per share. The company earned Rs. 90,00,000 in the year 2076. The company decided to distribute 20% cash dividend. A shareholder has 500 shares. (a) What is dividend ? Define it. (b) How much cash dividend did the shareholder get? Find it. (c) How much profit percent did shareholder get? Find it. (ii) There are 6,00,000 shares of Rs. 100 each in a bank. Virochan has 1,580 shares in that bank. The bank makes a net profit of Rs. 40,00,00,000 in a year and it distributes 15% of the profit to the shareholders. (a) Why is dividend different from bonus? Give reason. (b) How much dividend did it distribute to all the employees ? Find it. (c) What percent of the total profit is distributed as dividend ? 9. (i) A Bank has 5,00,000 shares. It made a net profit of Rs. 10,50,00,000 in a year and distributed a certain percent of profit as dividend. A shareholder, who has bought 1500 shares, received Rs. 39,375. (a) Define rate of dividend. (b) Find the total dividend amount to be distributed for all shares. (c) Find the rate of dividend of the bank. 100 Allied The Leading Mathematics-9 Commission and Dividend 101