A town in California fines residents who do not pay their property tax

Question

A town in California fines residents who do not pay their property taxes on time. All residents must pay their taxes before July 1st for that calendar year or face the following fine structure: 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; for each additional month that the taxes are overdue, the total fine is increased by $600 or doubled, whichever results in the lesser amount. 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?

(A) $1,400
(B) $1,800
(C) $2,400
(D) $21,400
(E) $22,800

(A) $1,400
(B) $1,800
(C) $2,400
(D) $21,400
(E) $22,800

Bunuel · Answer

Similar question from GMAT Prep: a-certain-library-assesses-fines-for-overdue-books-as-follow-92821.html

ENGRTOMBA2018 · Answer

Original amount = 20,000

Fine for July = 20,000 * 1% = 200

Fine for August = lesser of the 2 , 200+600= 800 or 200*2=400 . Pick 400

Fine for September = 400+600=1000 or 400*2 = 800. Pick 800

Fine for October = 800+600=1400 or 800*2 = 1600. Pick 1400.

Thus A is the answer.

The wording of the question should be have been clearer as total fines should be = 1400+800+400+200 = 2800 and NOT 1400.

1400 is the fine ONLY for the month of October!

TimeTraveller · Answer

Tax amount = $20,000.

Fine for July = 1% (20,000) = $200.
Fine for August =  MIN  (200+600, 2*200) = $400.
Fine for September =  MIN  (400+600, 2*400) = $800.
Fine for October =  MIN  (800+600, 2*800) = $1400.

Fine amount owed by the resident = $1,400. Ans (A).

monk16 · Answer

Total due (x) = 20,000
Let the fine be P
July = 1 % of x -> 200 = P after July 
August = 200 * 2 -> 400 = P after August (either double it or add 600 whichever is lesser)
September = 400 * 2 -> 800 = P after August (either double it or add 600 whichever is lesser)
October = 800 + 600 (since 600 < 800) --> 1400

answer A

Plunkster82 · Answer

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.

KarishmaB · Answer

Plunkster82

As 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)

ShubhamA · Answer

Last sentence of the problem clearly conveys about the total fine till October.
Now it seems, time has come if these sort of PS problems will have Critical Thinking analysis based on wording of problems.

bumpbot · Answer

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A town in California fines residents who do not pay their property tax

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A town in California fines residents who do not pay their property tax

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