Your electric bill is $136. You are charged 14% simple interest for late payments. How much do you owe if you pay the bill 1 month past the due date? (Round your answer to two decimal places.)

Question

When I was given this problem, my answer was 155.04 but it told me the answer is wrong. . . how?

Answer 1

Assuming it is a flat 14% penalty, you pay 100% of the bill plus an extra 14% of the bill, which totals to 114% of the bill. That is 1.14 times the bill.

1.14($136) = $155.04

Your answer is correct.