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Financial Maths, STD2 F1 EQ-Bank 32

Mei buys a sedan with a market value of \(\$71\,800\).

Stamp duty is calculated on the vehicle as follows:

    • 3% of market value up to \(\$45\,000\)
    • 5% of market value over \(\$45\,000\)

Calculate the amount of stamp duty payable by Mei.   (2 marks)

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\(\$2690\)

Show Worked Solution

\(\text{Stamp duty on first}\ \$45\,000=0.03\times 45\,000=\$1350\)

\(\text{Amount over}\ \$45\,000=71\,800-45\,000=\$26\,800\)

\(\text{Stamp duty on excess}=0.05\times 26\,800=\$1340\)

\(\therefore\ \text{Total stamp duty}=1350+1340=\$2690\)