72. A tax assessor determined that a commercial building with a 3.6% mortgage has a market value of $400,000. If the assessed value is 60% of market value and the tax rate is 63 1/8 mills, what is the annual tax?
Answer: C
The annual tax is $15,150.00.
To calculate the annual tax, first determine the assessed value by multiplying the market value of $400,000 by 60%, which results in an assessed value of $240,000. Then, multiply the assessed value by the tax rate of 63 1/8 mills (or 0.063125) to find the annual tax, yielding a total of $15,150.00.
A) 5,306.60
This option is incorrect. If the assessed value of $240,000 were taxed at the given rate of 63 1/8 mills, the resulting tax would be much higher than this figure. Specifically, 5,306.60 does not reflect the correct calculation based on the assessed value and tax rate.
B) 8,837.60
This option is also incorrect. Similar to option A, the calculation based on the assessed value of $240,000 and the tax rate would yield a higher amount. Therefore, 8,837.60 does not represent the correct annual tax amount.
C) 15,150.00
This option is correct. The annual tax calculation is based on the assessed value of $240,000 multiplied by the tax rate of 63 1/8 mills, which results in an annual tax of $15,150.00, confirming this as the accurate answer.
D) 25,250.00
This option is incorrect. The amount of 25,250.00 exceeds the annual tax that would be calculated from the assessed value and tax rate provided. It does not align with the mathematical computation based on the given data.
Conclusion
The correct answer is $15,150.00 because it accurately reflects the computation of the assessed value multiplied by the tax rate. All other options fail to match this calculation, demonstrating that they do not represent the correct annual tax for the property.