In Hendricks on Township, houses are assessed at 80% of the purchase price.
If Mr. Thomas buys a house in Hendricks on for $120,000 and rea estate taxes are $4.75 per $100 of assessed valuation, how much property tax must he pay per year?
Answer(s): C
Explanation:
Multiply the purchase price of the home by the assessment rate to find the assessed value.
120,000 × 0.8 = $96,000 (assessed value)
Find the number of hundreds in the assessed value.
$96,000 ÷ 100 = 960 (hundreds)
Multiply the number of hundreds by the tax rate.
960 × $4.75 = $4,560 (property tax)
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