Simple interest
Money & business
Remove an entered VAT or sales tax rate from a gross price to calculate the net amount before tax.
Divide the gross amount by one plus the rate divided by 100. A gross price of 120 at an entered 20% rate contains a net amount of 100.
gross ÷ (1 + rate ÷ 100); enter your applicable rate
Applying the formula to these values gives 100 .
Do not simply subtract 20% from a price that includes 20% tax: that would give a different answer. You must know the applicable rate.
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