Problema Solution
Ronald Brown missed an income tax payment of $2,600. The Internal Revenue Service
charges a 15% simple interest penalty calculated by the exact interest method. If the tax was
due on April 15 but was paid on July 17, what was the amount of the penalty charge?
Answer provided by our tutors
From April 15 till July 17 there are 93 days from the start date to the end date, but not including the end date.
t = 93 days
P = $2,600 the principal
r = 0.15 or 15% simple interest
I = the interest
I = P*r*t/365
I = 2600*0.15*93/365
I = $99.37
the amount of penalty charge was $99.37.