Question

In 1996, the price of a rare stamp inclusive of 3% GST was $3500. In 2010, the price of the same stamp
inclusive of 7% GST was 225% higher than that in 1996. Find
(a) the price of the stamp inclusive of GST in 2010,
(b) the amount of GST on the stamp in 2010,
(c) the percentage increase in amount of GST on the stamp from 1996 to 2010.

Answer 1

Based on the price of the stamp in 1996, and the increase in 2010, the following are true:

• a. price in 2010 = $7,875.
• b. amount of GST on the stamp in 2010 = $515.19
• c. percentage increase in GST from 1996 to 2010 = 405%.

How much has the price of the stamp changed in 2010?

The price in 2010 was:

= 3,500 x 225/100

= $7,875

The GST in 2010 is:

= (7,875 / 1.07) x 7%

= $515.19

The GST in 1996 is:

= (3,500 / 1.03) x 3%

= $101.94

The increase in the GMT is:

= (515.19 - 101.94) / 101.94

= 405%

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