Plunkster82 wrote:
This one's tough because based on the wording there are a few different ways to construct the formula. Initially, I constructed the formula as .01*20,000+600(n-1)= 2,000
Then I compared it to
200+400+800+1600=3,000
Neither of these are answers. So in going back to the problem, I realized that each month the late either doubles or is an additional 600. I thought it was an either/or calculation.
Then I calculated the incremental penalty for each month and compared to see if it exceeded $600.
200+200+400+600=1400.
1st month late) .01*20,000=200
2nd month late) An additional 200 which is less than 600, total owed after one month 200+200=400
3rd month late) An additional 400 which is less than 600, 400+400=800
4th month late) An additional 600 since, double the penalty would be 800 which exceeds 600. So it's 800+600=1400, A.
Plunkster82As per the wordings of the question, this is what you need to do:
For the first month the taxes are overdue (that would be any payment made on July 1st through July 31st), the total fine is 1% of the original tax bill; So on a tax bill of $20k, you would need to pay $200 fine if you pay any day in July.
for each additional month that the taxes are overdue, the total fine is increased by $600 or doubled, whichever results in the lesser amount. Next month, either fine will be doubled or 600 added whichever results in lesser amount. Which means as long as the fine is less than 600, every month it will be doubled. When the fine becomes more than 600, every month 600 more will be added to it.
So if paid in August, Fine = 400
If paid in Sept, fine = 800
If paid in Oct, fine = 800 + 600 = 1400
and now every month another 600 will be added.
What is the total fine for a resident of that town who originally owed $20,000 in property taxes, but did not pay until October 15th?For payment in october, fine will be 1400
Answer (A)