Molly Ellen, bookkeeper for Keystone Company, forgot to send in the payroll taxes due on April 15. She sent in the payment on November 8, The IRS sent her a penalty charge of 6.00% simple interest on the unpaid taxes of $1000. Calculate the penalty. (Remember that the government uses exact interest.)(Use Days in a year table.) (Do not round intermediate calculations. Round your answer to the nearest cent.)
I have been taking 365-172=207x .0006/1000
P = Po*r*t = 1000*(0.06/365)*192 = 31.56
= Penalty.
To calculate the penalty charge, we need to use the formula for simple interest:
Penalty = Principal × Interest Rate × Time
First, let's calculate the time period for which the penalty is charged. Molly sent the payment on November 8, which means the period of time between April 15 and November 8 needs to be determined.
To calculate the time period, we will use the Days in a Year table, which states that there are 365 days in a year.
Now, let's break down the calculation:
1. Calculate the time period in days:
From April 15 to November 8, there are:
- April: 30 days
- May: 31 days
- June: 30 days
- July: 31 days
- August: 31 days
- September: 30 days
- October: 31 days
- November (up to November 8): 8 days
Total days = 30 + 31 + 30 + 31 + 31 + 30 + 31 + 8 = 222 days
2. Convert the time period to years:
Time in years = Total days / Days in a Year
Time in years = 222 days / 365 days = 0.6082 years (rounded to 4 decimal places)
Now that we have the time period, we can calculate the penalty using the given information:
Principal (unpaid taxes) = $1000
Interest Rate = 6.00% = 0.06
Penalty = Principal × Interest Rate × Time
Penalty = $1000 × 0.06 × 0.6082
Penalty = $36.49 (rounded to the nearest cent)
Therefore, the penalty charge is $36.49.