Question

Samantha filed her tax return on August 1st and paid her $4000 balance owing. If the prescribed interest rate is 5%, how much did she owe in total?

A) $4050
B) $4320
C) $4000
D) $4370

Answer 1

Without the specific period during which the 5% interest on Samantha's balance owed from her tax return is to be calculated, it is not possible to determine the total amount owed.

Step-by-step explanation:

The question pertains to the calculation of interest on a balance owed from a tax return. If Samantha paid her $4000 balance on August 1st with a prescribed interest rate of 5%, then the total amount due would include the interest incurred. However, the question does not specify the period over which the interest accrues. Therefore, unless the duration is mentioned, we cannot calculate the precise interest amount. Assuming the interest rate is an annual rate and the balance was due without any extensions at the regular filing deadline (April 15th for most taxpayers), and Samantha filed on August 1st without any approved extension, there would be interest accrued for approximately 3.5 months. However, without exact information on interest compounding or the grace period for payment, any calculation would be speculative.