Question

. Ron and Barbara Lugo live in a city where the tax rate is 83.21 mills.The rate of assessment is 30%. The property that the Lugos own hasa market value of $367,500. What is their real estate tax for a year?

Answer 1

We have to calculate the real estate tax for a year.

The tax rate is 83.21 mills.

The rate of assessment is 30%.

The market value of the property is $367,500.

NOTE: a tax rate of 1 mill represents $1 of tax per $1000 of assessed value.

Then, we start by calculating the assessed value of the property.

This will be the market value times the rate of assessment:

$\begin{gathered} Assessed\text{ }value=market\text{ }value*assessment\text{ }rate \\ AV=367500*0.3 \\ AV=110250 \end{gathered}$

Now, we can calculate the tax as the assessed value times the tax rate.

The tax rate can be expressed as percentage using the meaning for a "mill":

$1\text{ mill}=\frac{1\text{ \ in tax}}{1000\text{ \ in assessed value}}$

Then, 83.21 mill will represent a tax of $83.21 per thousand dollars of assessed value.

We then can calculate the tax as:

$\begin{gathered} Tax=tr*AV \\ Tax=\frac{83.21}{1000}*110250 \\ Tax=0.08321*110250 \\ Tax\approx9173.90 \end{gathered}$

Answer: the real estate tax for a year will be $9,173.90.