A property has a market value of $75,000 and is assessed at 20% of value. The tax rate is $6.50 per $100 of value. What are the real estate taxes for this property?

Rationale

The real estate taxes for this property are $975.

To calculate the real estate taxes, first determine the assessed value of the property by taking 20% of the market value of $75,000, which results in an assessed value of $15,000. Then, applying the tax rate of $6.50 per $100 of value yields a total tax amount of $975.

A ($487) YOUR ANSWER

This option represents a lower tax amount that does not account for the full assessed value of the property. To arrive at $487, one would have to miscalculate either the assessed value or the tax rate, failing to reflect the correct tax based on the given property value.

B ($975) CORRECT

This is the correct amount calculated by first determining the assessed value of $15,000 (20% of $75,000) and then applying the tax rate of $6.50 per $100, resulting in taxes of $975. This calculation accurately reflects the tax liability based on the property’s value.

C ($1,500) YOUR ANSWER

This choice exceeds the correct tax amount, likely resulting from an incorrect application of the tax rate or a miscalculation of the assessed value. The real estate tax cannot reach this figure given the provided market value and tax rate parameters.

D ($4,875) YOUR ANSWER

This option represents an unrealistic tax amount, potentially arising from a misunderstanding of the tax calculation method. It suggests an incorrect multiplication of the assessed value or a significant error in the understanding of the tax rate, leading to this inflated figure.

Conclusion

The correct determination of real estate taxes hinges on accurately calculating the assessed value and applying the appropriate tax rate. For a property valued at $75,000 with a 20% assessment and a tax rate of $6.50 per $100, the taxes amount to $975, demonstrating the importance of precise financial calculations in real estate.

A property has a market value of $75,000 and is assessed at 20% of value. The tax rate is $6.50 per $100 of value. What are the real estate taxes for this property?

The real estate taxes for this property are $975.

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