13. The purchase price for a new home was $400,000. 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 $413,000 and the assessed value was $415,000. What will the buyer pay for one year property taxes if the tax rate is 2.5%?
Answer: C
The buyer will pay $10,375 for one year of property taxes.
To calculate the property taxes, the assessed value of the home, which is $415,000, is multiplied by the tax rate of 2.5%. This results in a total property tax of $10,375 for the year.
A) $10,000
This option is incorrect because it does not accurately reflect the calculation based on the assessed value and tax rate. If the assessed value is multiplied by the tax rate of 2.5%, the result is higher than $10,000.
B) $8,000
This option is incorrect as it significantly underestimates the property tax amount. Given the assessed value of $415,000 and a tax rate of 2.5%, the correct calculation leads to a much higher tax obligation.
C) $10,375
This option is correct. The property tax is calculated by taking the assessed value of $415,000 and multiplying it by the tax rate of 2.5%, resulting in $10,375 for one year of property taxes.
D) $10,330
This option is incorrect because it slightly underestimates the property tax amount. The calculation based on the assessed value of $415,000 at a tax rate of 2.5% yields a total of $10,375, not $10,330.
Conclusion
The correct answer is $10,375, as it is derived directly from the assessed value and the tax rate, showcasing the accurate calculation needed for property taxes. All other options either underestimate or miscalculate the tax obligation, failing to align with the proper formula for determining property taxes based on the given assessed value.