Basic Math/Maths and exchange rates
(Sorry to rush, on shared wi-fi)
I'm trying to work out how to calculate exchange rates and VAT/import duty for the cost of importing a car or importing goods.
I understand that for exchange rate it is:
FOREIGN CURRENCY = CURRENCY x EXCHANGE RATE
(only in capitals as it's quoted direct from my old maths textbook).
If I was in a country and $1 is £1.20 and I bought an item costing $200,
then is this calculation correct:
200 x 1.58 = £316
Here's my problem I'm trying to work out:
I want to import a new Chevrolet car into the UK, it costs $23,480 in the U.S. and the exchange rate is $1 = £0.68,
so using the above:
23480 x 0.68 = £15966.4 (or £15966 if I round it up since number after decimal is below 5).
The VAT rate is 20% and import duty is 10%.
What calculation would I do for the exchange rates, VAT rate and import duty (ensuring it's mathematically correct).
This isn't for business use, just personal use, as my maths on this is a little bit poor.
You've already computed the conversion, the question is, is the VAT and import duty charged on the base price or is the VAT based on the price of the car and the duty charge? If the two charges are on the base price, then multiply £15966 by .2 and .1 and add your two results to £15966. I wouldn't round if you really want accuracy, but if you just want a good approximation, then no problem rounding. If the VAT is based on both the car price and import duty, then multiply £15966 by 1.1, then multiply that result by 1.2. Or, if the import duty is based on the VAT, then just reverse and multiply £15966 by 1.2 and the result of that by 1.1.