This question was included in all tests during the 1st MATH-Inic Vedic Mathematics National Challenge except in the Beginner’s category not only to show the correct way of computing the discount but also because it is very useful to senior citizens who most probably have a basic calculator in their cell phones.
The list or selling price of a commodity is determined by adding 12% to the vatable sales amount. So it is incorrect to just deduct 12% from the list price and then multiply the difference by 0.80, It is also not correct to deduct 32% from the list price.
As shown in most cash receipts, the Value Added Tax(VAT) amount is computed first and deducted from the List or Selling price to arrive at the Vatable Sales Amount. From this Vatable Sales Amount, the 20% senior citizen’s discount is deducted to arrive at the amount the senior citizen has to pay.
Choice C is correct: to compute the VAT amount, the list price must be multiplied by (12/1.12)% and after deducting the VAT from the list price, we must also deduct 20% senior citizen discount. But this is not easy to compute, even with a calculator.
The easier way is choice D: multiply the List price by (5/7)!
Assume a Vatable sale of P100. Add P12 Vat so the list price must be P112.
Now seniors must only pay 80% of the Vatable Sales Amount or P80.
It is easy to see that 80/112 can be reduced to 5/7.