54. 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 $415,000 and the assessed value was $417,000. What will the buyer pay for one year's property taxes if the tax rate is 3.5%?
Answer: C
The buyer will pay $14,595 for one year's property taxes.
To calculate the annual property taxes, we need to use the assessed value of the home, which is $417,000, and apply the tax rate of 3.5%. This results in an annual property tax of $14,595.
A) $14,000
This option is incorrect because it represents a calculation based on a different assessed value or tax rate. With the assessed value at $417,000, the taxes calculated at 3.5% would not result in $14,000.
B) $11,200
This option is also incorrect as it suggests a significantly lower property tax amount. The figure does not align with the assessed value of $417,000 at the given tax rate of 3.5%, which would yield a higher tax amount.
C) $14,595
This option is correct. By multiplying the assessed value of $417,000 by the tax rate of 3.5%, the calculation yields $14,595 in property taxes for the year, accurately reflecting the tax obligation based on the assessed value.
D) $14,530
This option is incorrect as it does not correctly reflect the property tax calculation. The value of $14,530 falls short of the correct computation based on the assessed value and tax rate provided.
Conclusion
The correct answer, $14,595, is derived from applying the 3.5% tax rate to the assessed value of $417,000. Other options either miscalculate the assessed value or do not align with the correct tax rate, demonstrating why they do not represent the accurate property tax obligation.