Molly Ellen, bookkeeper for Keystone Company, forgot to send in the payroll taxe

Question

Molly Ellen, bookkeeper for Keystone Company, forgot to send in the payroll taxes due on April 15. She sent the payment November 8. The IRS sent her a penalty charge of 6.80% simple interest on the unpaid taxes of $1,800. 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.)

Molly Ellen, bookkeeper for Keystone Company, forgot to send in the payroll taxes due on April 15. She sent the payment November 8. The IRS sent her a penalty charge of 6.80% simple interest on the unpaid taxes of $1,800. 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.)

Explanation / Answer

Penalty rate = 6.80%

Unpaid taxes = 1800

Delayed time = Apr 15 to Nov 8

No of days

April = 15

May = 31

JUne =30

July =31

Aug =31

Sep =30

Oct =31

Nov =8

Total days = 207

Simple interest for 207 days for 1800 @ 6.8% = 207(6.8)1800/36500 = 10.208 =10.21 dollars

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