hey guys hope you're doing well so this lesson will be all about what is that so I'm going to explain exactly how what that is and we're going to look at calculations now I know you've probably heard about that and you've looked at calculations from earlier grades already but in this lesson I'm going to do my best to help you to have a very good understanding of what it is and also a nice easy way to do the calculations for this lesson uh we're going to use 15 for that okay um a couple years ago we used to use 14 here in South Africa now it's 15 but you always have to make sure because some examples from textbooks and things like that they still using 14 so you always need to make sure what you are using Okay so let's get started let's let's talk about what is that so that it stands for value added tax now what it really is is the following so let's say for example you sell you have a big Factory and you sell t-shirts okay so here you sell t-shirts let's just try see if I can draw a nice t-shirt okay so that's all it's very thinner here but anyway um that's a t-shirt now let's say that your t-shirt is worth 100 Rand okay but then what happens is that let's say that that is the price without that price without that so you think that that t-shirt is worth 100 Rand but you're not gonna sell it for a hundred Rand what you rather gonna do is the following you are going to add 15 onto that price okay so you're gonna um you're gonna add 15 now don't worry about the calculations right now I'm just going to add on 15 and that's going to give you 115 Rand okay now that is what now what you will do is that in your factory or in your shop you will sell you will tell the people who are buying your item that the shirt is 115 Rand okay so they're gonna give you 115 Rand so here comes the 115 Rand but then what happens is that that 115 Rand um they're gonna give it to you but then what you need to do is you need to give 15 back to the government or SARS who handles the taxes of our country so you're gonna give 15 Rand to um to the government and then you're gonna get your 100 Grand after that okay so So when you buy something at a shop like let's say you go to the shop and you buy um let's say you buy bread or whatever you buy the price that you see in the shop is this one over here which already has the vat included and then what happens is that you're gonna give that money to the shop and then at the end of the month or at the end of the year then the shop is going to have to go give all of the um all of the vet to the government or to SARS and then and then they get to keep the rest okay so does that make sense so all the prices that you see in the shops already have the vat included some items don't have that um we'll talk about that in next lessons but the price that you see in the shop is already the price that has the vat included okay so let's do some calculations now to practice how to use the 15 so so the formula that you're going to use is going to be really basic you're just going to take the price without that multiply by 1.15 and that and the one five is the 15 so if you're doing a question that is 14 then you would use 14 if it's like 13 you would say 1.13 and that's going to be equal to the price with that okay now your teacher might use a different one they might have the price without that multiplied by 115 over 100. now that 115 over 100 is 1.15 okay so I'm just taking a little bit of a shorter version and that's where I'm getting the 1.15 from so uh let's just write this out again so I'm going to go um price without say price of that multiplied by 1.5 is equal to the price width okay now something else I want to say that's just going to make your life a whole lot easier is you can actually just do this to add that to add that multiply by 1.15 to take that away divide by 1.15 okay that's actually what this formula is going to do so to add that onto an item so let's say you have an item that doesn't have an event to add the vet on you just multiply by 1.15 to take the vat away you just divide by 1.15 so here's our first example it says that a soccer ball costs 120 Rand excluding that so that means without that so that's with out that okay now it says question a determine the price with that okay so what we've learned is that if you want to include that just multiply with 1.15 so you're just going to say 120 multiplied by 1.15 and that'll give us 138 Rand so that is the price that you would actually pay at the shop so how much that was added well this was the original price before the vet and this is the price after the vet so for question B you could just say 138 Grand minus 120 and that would be 18 Rand so they added on 18 Rand of that this question says Martin paid 199 Rand for a pair of pants that is already included how much does the pair of pants cost without vet okay so to remove the vat you divide by 1.15 so you're going to say 199 uh divided by 1.15 this is for question a and that'll be 107 I'm going to round to two decimal places so that's 173 Rand um and four cents okay now question B says determine the vat amount okay so the original price was 199. and the the price without the vat is that so you can just minus those two so you can say 199 minus 173.04 and that'll be 25.96 item costs 1 000 Rand without that determine the price with that okay so it is to include that multiply you just want to make the number bigger so you multiply and then when you want to make the number smaller you divide so we're going to say for question a you're just going to say one thousand multiply by 1.15 and that's going to give you 1150 Rand and so for this next one how much that was added or you can just say 1150 minus one thousand and so that'll be 150 Rand here's our last question for this lesson I receive an invoice for a new mattress on the invoice it lists the mattress as 2150 Rand without that determine the price with vet okay so to include that you're just going to multiply with 1.15 so we're just going to say 2150 multiplied by 1.15 and so that's going to be 2 4 7 2 comma five zero and then how much fat was added well there you just minus the um you just minus the big one you say big one minus one okay so minus two one five oh and that'll be three two two fifty three hundred and twenty two Rand 50.