77. 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 $268,000 and the assessed value was $263,000. What will the buyer pay for one year property taxes if the tax rate is 2%?
Answer: C
The buyer will pay $5,260 for one year of property taxes.
To calculate the property taxes, the assessed value of the home, which is $263,000, is multiplied by the tax rate of 2%. This results in an annual tax payment of $5,260.
A) $5,000
This option is incorrect because it underestimates the property tax calculation. At a tax rate of 2%, the assessed value of $263,000 would yield a tax amount of $5,260, not $5,000.
B) $4,000
This choice is also incorrect as it significantly underrepresents the tax amount. The calculation based on the assessed value at a 2% tax rate clearly indicates a higher tax burden than $4,000.
C) $5,260
This is the correct answer. The property taxes are calculated as 2% of the assessed value of $263,000, resulting in an annual payment of $5,260.
D) $5,360
This option is incorrect because it slightly overestimates the property tax. The correct calculation based on the assessed value at a 2% tax rate does not reach $5,360.
Conclusion
The calculation of property taxes is directly based on the assessed value and the specified tax rate. The correct answer, $5,260, accurately reflects the tax obligation for the buyer, while the other options either underestimate or overestimate this amount. Therefore, option C is definitively correct based on the given values.