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15% gst

Discussion in 'Living Room' started by moyjos, 1st Nov, 2015.

  1. moyjos

    moyjos Well-Known Member

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    without all the "should we or shouldn't we" have a 15% gst

    my question is...what is the backwards calculation for a 15% gst?
    eg 10% gst $100 +10% = $110 backwards...$110 -(110/11) = $100

    I thought the logical was 12.5%gst because it's reverse was divide x 9
    $100 +12.5% = $112.5 backwards...$112.5 -(112.5/9) = $100

    so....100 +15% = $115 backwards....$115-(115/ x ) = 100

    I come up with 7.66666666666 ????? surely it will not be that cumbersome??

    aggghhh my bookeeping OCD will HATE this if my books are out by a few cents :(
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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  3. Charlotte30

    Charlotte30 Well-Known Member

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    In NZ we take GST figure divide by 23 and multiply by 20 eg 115/ 23 x 20 = 100. Bit more convoluted than 10% but it works.
     
  4. moyjos

    moyjos Well-Known Member

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    Oops sorry, I replied to this last night and lost the post :(o_O

    Thanks for those answers, I was getting so hung up on the "divide by" number I could not see the other answers.
     
  5. spludgey

    spludgey Well-Known Member

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    I've seen people do these calculations, but it's never made sense to me. Why don't you just divide by (1+GST)?
     
  6. moyjos

    moyjos Well-Known Member

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    Yes that is the link D.T posted

    If we assume that VAT is at a rate of 15%...
    Gross price divided by 1.15 = Net price
    Price after tax divided by 1.15 =
    Price before tax

    or in fractional form (which is Charlottes answer)
    Price after tax divided by 23/20 = Price before tax.
     
  7. spludgey

    spludgey Well-Known Member

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    But is it really easier to type "*23/20" instead of "/1.15"?

    Feels like American betting odds to me...
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    Whole numbers for the dummies.

    One pollie this morning said there'd be more $ for xy&z. I laughed at his lack of understanding of the gst, it is a State tax collected by the Fed's and returned to the states.

    If anything, it will allow the feral gummint to redistribute its own budget allocations.
     
  9. Azazel

    Azazel Well-Known Member

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    Hope it doesn't go through, I remember most things went up by more than 10% when they 1st brought in the GST.
     
  10. D.T.

    D.T. Adelaide Property Manager Business Member

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    I'd prefer there to be more GST and balanced by equal cuts in other taxes.
     
  11. datto

    datto Well-Known Member

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    A GST increase will only create more full-on bogans.

    At the moment there are people tinkering on the bogan threshhold.

    A sudden increase in their cost of living and whammo, they turn into a bogan. I've seen it happen.
     
    Last edited: 2nd Nov, 2015
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  12. Scott No Mates

    Scott No Mates Well-Known Member

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    Really? And you didn't report it to the ACCC?
     
  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Currently with GST at 10% you divide the full cost by 1.10 to get the base cost.

    If GST becomes 15% you'd divide the full cost by 1.15 to get the base cost.

    If GST becomes 22% you'd divide the full cost by 1.22 to get the base cost.

    The equation is:
    Base cost x (100% + GST%) = Full cost
    - or -
    Base cost = Full cost / (100% + GST%)

    Roughly year 8 level algebra.
     
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  14. moyjos

    moyjos Well-Known Member

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    the calculation to find the GST component just becomes a two part equation with 15% where as now it just a "divide by 11 for get the gst component"

    Gst component will be
    gst = gross cost - (gross/1.15)

    no biggie, just getting my head straight.
     
  15. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    The problem is people have been taught to think in fractions rather than percentages. It's a throwback to when we used pounds and shillings as our currency and feet and miles as distance.

    You can think, "divide by 11 and multiply by 10", but that only works when the numbers are convenient. It become a complete mess if the GST component become 11.624%.

    If you think in percentages then the conversion is simply multiplying or dividing by 1.11624.

    The solution is very simple, but 3 generations on and our schools and even our language is still imparting a completely redundant and very inaccurate way of doing mathematics.

    Some kids figure this out in early high school and go on to become engineers, scientists, physicists, etc. Those who don't have that light bulb moment in year 8 tend to drop maths at the first opportunity.
     
  16. geoffw

    geoffw Moderator Staff Member

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    If you're doing these calculations in a spreadsheet, don't forget to round the result each time. Otherwise totalling a number of calculated fields may not appear to give the excat result.
     
  17. Simon Hampel

    Simon Hampel Founder Staff Member

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    I was a bit distressed to learn that my son (year 1) is being told "getting the correct answer isn't as important as understanding the process" in maths.

    To which I respond - if you aren't getting the correct answer, you don't understand the process!

    This isn't social studies - there is ALWAYS a correct answer in maths (see note 1)

    (Note 1 - rounding errors notwithstanding - also see note 2)
    (Note 2 - there is also room for interpretation in the conventions of order of operations which may lead to differences in what is understood to be the correct answer - also see note 3)
    (Note 3 - don't get me started on non-algebraic maths - also see note 4)
    (Note 4 - complex numbers? unrepresentable values? etc etc?)
     
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  18. spludgey

    spludgey Well-Known Member

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    I'm yet to see a year 1 that gets all questions right every time, even if they understand the process.

    I would wholeheartedly agree with the statement that the process is more important. If you know that 3+4=7 then that's great, but the solution of 4+3 might still be a complete mystery to you if you don't understand the process.
     
  19. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Good ol' Tom Lehrer "and that leaves fives... well six actually but the idea is the important thing"
     
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  20. Spanna

    Spanna Well-Known Member

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    The process is the important part not the answer.
    Granted if you get 100% of the process correct you get the correct answer, but if you get 99% of the process correct and 1% wrong you get the wrong answer.

    Trust me if you failed a question based on the answer the majority of people would fail all Maths based tests.

    Conversely you can get every answer wrong in an exam and still get a high distinction!