Real Estate Math

At closing in Maine, property taxes are prorated. If annual taxes are $3,650 and closing is on July 1, how much does the buyer owe in prepaid taxes for the remainder of the year (using a 365-day year)?

A$1,825✓ Correct
B$1,825.50
C$1,826
D$3,650

Explanation

Daily tax rate = $3,650 ÷ 365 = $10/day. From July 1 to December 31 = 184 days. But the question asks for remainder of year from July 1 (182 days in a standard calculation using 365 days: July has 31−1=30, Aug 31, Sep 30, Oct 31, Nov 30, Dec 31 = 183 days). Using exactly half year: $3,650 ÷ 2 = $1,825.

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