53. The purchase price for a new home was $225,000. The buyer put down 20% and the balance was a mortgage for 80% of the purchase price. The appraised value at the time of closing was $239,000 and the assessed value was $240,000. What will the buyer pay for one year's property taxes if the tax rate is 3.5%?
Answer: C
The buyer will pay $8,400 for one year's property taxes.
To determine the annual property taxes, the assessed value of the home should be used, which is $240,000. Multiplying this assessed value by the tax rate of 3.5% yields an annual tax amount of $8,400.
A) $7,875
This option is incorrect because it does not accurately reflect the calculation based on the assessed value. If $7,875 were to be the result, it would imply a lower tax rate or assessed value than what is given in the question.
B) $6,300
This option is also incorrect. The calculation leading to $6,300 would suggest a significantly lower assessed value or tax rate, neither of which aligns with the provided values of $240,000 and a tax rate of 3.5%.
C) $8,400
This is the correct answer. By calculating 3.5% of the assessed value of $240,000, the property taxes come to $8,400, which matches the information given in the question.
D) $8,370
This option is incorrect as it does not match the calculated property tax from the assessed value. An answer of $8,370 would imply a slightly different tax rate or assessed value, which is not supported by the data provided.
Conclusion
The correct answer is $8,400 as it directly results from applying the tax rate of 3.5% to the assessed value of $240,000. All other options fail to provide accurate calculations based on the given figures, demonstrating a misunderstanding of how property taxes are derived from assessed values and applicable rates.