Samantha filed her tax return on August 1st and had a $4000 balance owing.If the prescribed interest rate is 5%,how much did she owe in total?
A)$4050
B)$4320
C)$4051
D)$4374

Question

Quizplus · Accepted Answer

To calculate the total amount owed by Samantha, we need to add the balance owing with the interest accrued. 
The interest accrued can be calculated using the formula: 
Interest = balance owing x prescribed interest rate x time
Here, the time can be calculated as the number of days from August 1st to the date of payment.
Let's assume Samantha paid her taxes on October 31st, so the time would be 91 days (31 days in August + 30 days in September + 31 days in October).
Using the formula, we get: 
Interest = $4,000 x 0.05 x (91/365) = $45.21
Therefore, the total amount owed by Samantha would be: 
Balance owing + Interest = $4,000 + $45.21 = $4,045.21
Rounding to the nearest dollar, we get $4,051, which is option C. However, the question asks for the answer to the nearest cent, which is option D, $4,374, as we cannot round down to the nearest dollar.

Samantha Filed Her Tax Return on August 1st and Had