Question

Jonathan wants to defer payment of his $4,500 tax bill for 4 months. If he must pay an annual interest rate of 15% for doing this, what will his total payment be?

Answer 1

To calculate the total payment Jonathan will make after deferring his tax bill for 4 months at an annual interest rate of 15%, we'll use the simple interest formula:

\[ I = PRT \]

Where:
- \( I \) = Interest
- \( P \) = Principal amount (the tax bill)
- \( R \) = Rate of interest per year (as a decimal)
- \( T \) = Time (in years)

Given:
\( P = \$4,500 \) (tax bill)
\( R = 15\% \) per year or \( 0.15 \) as a decimal
\( T = \frac{4 \text{ months}}{12 \text{ months/year}} = \frac{1}{3} \text{ years} \)

First, calculate the interest for 4 months:

\[ I = PRT \]
\[ I = 4500 \times 0.15 \times \frac{1}{3} \]
\[ I = 225 \]

The interest for 4 months is $225.

Now, add the interest to the original tax bill to find the total payment Jonathan will make:

Total payment = Principal amount + Interest
Total payment = $4,500 + $225
Total payment = $4,725

Therefore, Jonathan's total payment after deferring his $4,500 tax bill for 4 months at an annual interest rate of 15% will be $4,725.

Answer 2

Jonathan will have to pay a total of $4,725 after deferring his $4,500 tax bill for 4 months at an annual interest rate of 15%, which includes $225 in interest.

Step-by-step explanation:

Jonathan wants to defer payment of his $4,500 tax bill for 4 months, with an annual interest rate of 15%. To calculate the total payment he will have to make after 4 months, we need to calculate the simple interest for that period and add it to the initial tax bill.

First, we'll find the monthly interest rate by dividing the annual interest rate by 12. So for a 15% annual rate, the monthly rate is 15%/12 = 1.25%. Next, since interest rates are typically expressed as decimals in calculations, we'll convert 1.25% to a decimal, which is 0.0125.

Now, we can calculate the simple interest by multiplying the principal ($4,500) by the monthly interest rate (0.0125) and then by the number of months (4):

Interest = Principal × Monthly Interest Rate × Number of Months

Interest = $4,500 × 0.0125 × 4

Interest = $225

Finally, we add the interest to the original tax bill:

Total Payment = Principal + Interest

Total Payment = $4,500 + $225

Total Payment = $4,725.