34. The purchase price for a new home was $276,000. 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 $285,000 and the assessed value was $289,000. What will the buyer pay for one year's property taxes if the tax rate is 3%?
Answer: C
The buyer will pay $8,670 for one year's property taxes.
To calculate the property taxes, we need to determine the assessed value of the home, which is $289,000. Applying the tax rate of 3% results in annual property taxes of $8,670.
A) $8,250
This option is incorrect. If we calculate property taxes based on the assessed value of $289,000 at a 3% tax rate, the result is $8,670. Therefore, $8,250 does not accurately reflect the calculation.
B) $6,600
This option is also incorrect. The calculation based on the assessed value of $289,000 at a 3% tax rate yields $8,670, making $6,600 an underestimation of the property taxes owed.
C) $8,670
This is the correct option. The annual property taxes are calculated by taking 3% of the assessed value of $289,000, which equals $8,670. This accurately reflects the tax obligation based on the provided information.
D) $8,550
This option is incorrect. If we apply the 3% tax rate to the assessed value of $289,000, the resulting property taxes would be $8,670, not $8,550. Thus, this option does not represent the correct amount owed.
Conclusion
The correct answer is $8,670, as it directly corresponds to the calculated property taxes based on the assessed value at a 3% tax rate. All other options either underestimate or miscalculate the tax amount, highlighting the importance of using the correct assessed value in property tax calculations.