Question

Elmo Johnson was late on his property tax payment to the county. He owed $7,500 and paid the tax four months late. The county charges an annual penalty of 10%. Find the amount of the penalty for the four-month period.

Answer 1

Answer: $250

Explanation:

From the question, we are told that Elmo Johnson was late on his property tax payment to the county and that he owed $7,500 and paid the tax four months late.

We are further told that the county charges an annual penalty of 10%. The amount of the penalty for the four-month period goes thus:

Annual penalty = 10% × $7500

= 0.1 × $7500

= $750

Since he is four months late and there are twelve months in a year, this will be:

= $750 × 4/12

= $750 × 1/3

= $750/3

= $250