A washing machine is advertised with a marked price of $P$ naira. The seller offers a cash discount of 10 % on the marked price. In addition, the seller adds a compulsory environmental levy equal to 4 % of the marked price, but this levy is not disclosed to the consumer before purchase. The consumer pays a total of ₦112,800.

(a) Determine the marked price $P$.
(b) Calculate the cash discount amount and the levy amount.
(c) Under the Consumer Protection Act, a seller who fails to disclose any additional charge must pay a penalty equal to 20 % of the undisclosed charge. Compute the penalty payable by the seller.
(d) State whether the seller complied with the disclosure requirement.

Question

A washing machine is advertised with a marked price of $P$ naira. The seller offers a cash discount of 10 % on the marked price. In addition, the seller adds a compulsory environmental levy equal to 4 % of the marked price, but this levy is not disclosed to the consumer before purchase. The consumer pays a total of ₦112,800.

(a) Determine the marked price $P$.
(b) Calculate the cash discount amount and the levy amount.
(c) Under the Consumer Protection Act, a seller who fails to disclose any additional charge must pay a penalty equal to 20 % of the undisclosed charge. Compute the penalty payable by the seller.
(d) State whether the seller complied with the disclosure requirement.

Accepted Answer

Marked price = 120000; Discount = 12000; Levy = 4800; Penalty = 960; Seller did not comply

Gce Model Questions Vol1 2025 Commerce Question 1

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