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 need to apply the tax rate of 2.5% to the assessed value of the home, which is $266,000. Multiplying $266,000 by 0.025 gives us $6,650.
A) $6,250
This option is incorrect because it represents a calculation based on a different value. If the tax were calculated on the purchase price of $250,000 instead of the assessed value, the property taxes would be $6,250 (250,000 * 0.025), but the assessed value is the correct basis for calculation.
B) $5,000
This option is also incorrect. A tax amount of $5,000 would imply a much lower assessed value, specifically $200,000, which does not reflect the assessed value provided in the question. Therefore, it is not a valid calculation based on the information given.
C) $6,650
This is the correct answer. The property taxes are calculated by applying the tax rate to the assessed value of $266,000. The calculation is $266,000 * 0.025 = $6,650, making this option accurate.
D) $6,580
This option is incorrect, as $6,580 does not match the calculated property tax based on the assessed value. This figure does not correspond to any logical calculation using the provided tax rate and assessed value.
Conclusion
The correct answer, $6,650, is derived directly from the assessed value and the tax rate provided. All other options fail to accurately reflect the required calculation based on the assessed value, making them incorrect. Thus, $6,650 is the only valid amount for the property taxes owed.