1. A home has a market value of $210,000. The assessed value is 50% of the market value. What are the annual real estate taxes if the tax levy is 53.25 mills?
Answer: C
The annual real estate taxes are $5,591.25.
To calculate the annual real estate taxes, we first determine the assessed value, which is 50% of the market value of $210,000, resulting in an assessed value of $105,000. Then, we multiply this assessed value by the tax levy of 53.25 mills (or 0.05325) to find the annual taxes, yielding $5,591.25.
A) $2,236.50
This option is incorrect because it does not reflect the correct calculation based on the assessed value and the tax levy. The calculations do not support this figure, as the assessed value of $105,000 multiplied by 0.05325 does not equate to $2,236.50.
B) $3,943.66
This option is also incorrect. The calculation for the taxes should yield a higher amount than this. When applying the tax rate of 53.25 mills to the assessed value of $105,000, the result is significantly higher than $3,943.66.
C) $5,591.25
This is the correct answer. The assessed value of $105,000 multiplied by the tax rate of 53.25 mills results in $5,591.25, which accurately represents the annual real estate taxes owed.
D) $11,182.50
This option is incorrect as it significantly overestimates the annual real estate taxes. The calculation based on the assessed value and the tax levy does not support such a high tax figure; it is well above the calculated amount of $5,591.25.
Conclusion
The correct calculation of annual real estate taxes based on the assessed value of $105,000 and a tax levy of 53.25 mills yields $5,591.25. All other options fail to accurately reflect the calculations necessary to arrive at the correct tax amount, either underestimating or overestimating the annual taxes owed. Thus, option C is definitively the right choice.