Solve the problem.
-In one county, property is assessed at 45% of market value with a tax rate of 35.8 mills. In a second county, property is assessed at 33% of market value with a tax rate of 42.0 mills. If you had $110,000 to spend on a house, which county would charge the lower property tax? Find the annual amount saved.

Question

Quizplus · Accepted Answer

First, we need to calculate the assessed value of the property in each county:

In the first county: 
Assessed value = 45% of market value = 0.45 x $110,000 = $49,500

In the second county: 
Assessed value = 33% of market value = 0.33 x $110,000 = $36,300

Next, we need to calculate the annual property tax for each county:

In the first county: 
Property tax = (tax rate) x (assessed value/1000) = 35.8 x ($49,500/1000) = $1,773.90

In the second county: 
Property tax = (tax rate) x (assessed value/1000) = 42.0 x ($36,300/1000) = $1,525.80

Therefore, the second county would charge the lower property tax, and the annual amount saved would be:

$1,773.90 - $1,525.80 = $248.10

Rounding to the nearest dollar, the annual amount saved is $247.50. First county: 
Assessed value = 0.45 x $110,000 = $49,500
Property tax = $49,500 x 0.0358 = $1,770.60

Second county: 
Assessed value = 0.33 x $110,000 = $36,300
Property tax = $36,300 x 0.042 = $1,524.60

The second county charges lower property tax. 
Annual amount saved = $1,770.60 - $1,524.60 = $246
Therefore, the best choice is C.

Solve the Problem. -In One County, Property Is Assessed at 45% of Market