In recent years households in South Africa have experienced a large increase in electricity costs - NSC Mathematical Literacy - Question 1 - 2016 - Paper 2

To verify Mr Chan's estimation, we first calculate the total quotation amount for Option 2 and find the difference between the two options.

Calculating Option 2:

• Total cost of Option 2 = R3 499.00 + R499.00 + R189.00 = R4 187.00

Now, we find the difference between Option 1 and Option 2:

$ext{Difference} = R4 187.00 - R4 055.80 = R131.20$

Mr Chan's estimation that the difference is less than R1 000.00 is valid, as R131.20 is indeed less than R1 000.00.

Mr Chan may choose the more expensive option due to better service quality, such as warranty provisions, customer support offered by the supplier, or better installation services.

The tax rebate directly reduces the amount of tax payable by decreasing the taxable income. This means the individual can retain more of their income after taxes.

Medical aid credits also reduce the tax payable by providing a deduction based on the contributions made to the medical aid scheme. This further lowers the effective tax rate, helping individuals save on their tax liabilities.

To verify the dealer's claim, we start with her taxable income of R742,000 for the tax year:

Calculating the tax payable using the tax brackets:

• For the first R700,000: R208,587 plus 41% of the amount exceeding R700,000.

Calculating additional tax for the amount over R700,000:

$ext{Additional Tax} = R742,000 - R700,000 = R42,000$ $ext{Tax} = R208,587 + 0.41 imes R42,000 = R208,587 + R17,220 = R225,807$

For the next tax year, she stated an increase of R150: $ext{Total Tax for 2015/2016} = R225,807 + R150 = R225,957$

Thus, her calculation is not valid as the increase appears unreasonable for a R150 increment if calculated accurately.