67. The purchase price for a new home was $250,000. 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 $263,000 and the assessed value was $266,000. What will the buyer pay for one year's property taxes if the tax rate is 2.5%?
Answer: C
The buyer will pay $6,650 for one year's property taxes.
To calculate the property taxes, we use the assessed value of the home, which is $266,000. Multiplying the assessed value by the tax rate of 2.5% gives us the total property tax amount.
A) $6,250
This option is incorrect because it suggests that the property taxes are calculated based on a lower assessed value or a different tax rate. The correct calculation uses the assessed value of $266,000, which results in a higher tax amount than this option provides.
B) $5,000
This option is also incorrect as it implies an even lower tax payment than option A. Given the assessed value and the tax rate, there is no scenario in which the property taxes would amount to $5,000 based on the provided figures.
C) $6,650
This is the correct answer. The property tax is calculated by multiplying the assessed value of $266,000 by the tax rate of 2.5%, resulting in $6,650. This calculation accurately reflects the tax obligation for the buyer.
D) $6,580
This option is incorrect because it suggests a property tax amount that does not align with the assessed value and tax rate provided in the question. The calculation of property taxes based on the assessed value should yield a figure closer to $6,650.
Conclusion
The correct answer is $6,650 because it results from the accurate calculation of property taxes based on the assessed value of $266,000 at a tax rate of 2.5%. Other options fail to represent the correct tax amount, either by miscalculating the assessed value or by using an incorrect tax rate.