Given the basic price = 12000, VAT = 10 %, find the VAT to be paid.
(a) 1200
(b) 120
(c) 1500
(d) 1000

Hint: To solve the given question, we will first find out what percentage is. Then we will try to express any percentage in the proper fraction form. Then we will find a value of 10 % by converting to the proper fraction form. Then we will find out what will be 10 % of 12000 by multiplying the proper fraction obtained by 12000. The product of these two will be the required VAT (Value Added Tax) which is to be paid.

Complete step-by-step answer:
Before we solve the given question, we must know what the percentage is. A percentage is a number or ratio expressed as a proper fraction of 100. It is often denoted by the percent sign, “%”. Thus, when we say that, we are given x %, we actually mean that is \[\dfrac{x}{100}\] part of a number or an entity.
Thus, we will first convert 10 % into a proper fraction form. Thus, the value of 10 % is:
\[10\text{ Percent}=\dfrac{10}{100}\]
Or we can say that,
\[\Rightarrow 10\text{ Percent}=\dfrac{10}{10\times 10}\]
\[\Rightarrow 10\text{ Percent}=\dfrac{1}{10}\]
Thus, 10 % is equal to one-tenth part of an entity.
Now, we have to find the value of VAT (Value Added Tax) which is to be paid. For this, we are given that VAT is 10 % of the basic price, i.e. VAT is one-tenth of 12000. Thus, we will get,
\[VAT=\dfrac{1}{10}\times 12000\]
\[\Rightarrow VAT=\dfrac{12\times 100\times 10}{10}\]
\[\Rightarrow VAT=12\times 100\]
\[\Rightarrow VAT=1200\]
Thus, the VAT to be paid is 1200. Hence, option (a) is the right answer.

Note: The alternate way of solving the given question is shown below.
We have to find 10 % of 12000. We know that 100 % of 12000 will be equal to 12000. Thus, we have,
\[100\text{ Percent of }12000=12000\]
\[\Rightarrow \left( 10\times 10 \right)\text{Percent of }12000=12000\]
\[\Rightarrow 10\times \left( 10\text{ Percent of }12000 \right)=12000\]
\[\Rightarrow 10\text{ Percent of }12000=\dfrac{12000}{10}\]
\[\Rightarrow 10\text{ Percent of }12000=1200\]