Question

An accountant for a corporation forgot to pay the firm's income tax of $725,685.38 on time. The government charged a penalty of 7.3% interest for the 42 days the money was late. Find the total amount (tax and penalty) that was paid. Assume 365 days in a year. The total amount paid was $ (Round to the nearest cent as needed.)

Answer 1

Explanation:

To find the total amount paid, you need to calculate the penalty and add it to the original tax amount.

First, calculate the penalty:

Penalty = Tax Amount × (Interest Rate/100) × (Number of Days/365)

Penalty = $725,685.38 × (7.3/100) × (42/365)

Penalty ≈ $7,016.88 (rounded to the nearest cent)

Now, add the penalty to the original tax amount to find the total amount paid:

Total Amount Paid = Tax Amount + Penalty

Total Amount Paid = $725,685.38 + $7,016.88

Total Amount Paid ≈ $732,702.26 (rounded to the nearest cent)

So, the total amount paid, including tax and penalty, was approximately $732,702.26.