Real Estate Math
A Minnesota home's assessed value increased from $280,000 to $300,000 over one year. If the tax rate is 1.4%, how much more will the owner pay in property taxes?
A$200
B$280✓ Correct
C$300
D$420
Explanation
Previous tax = $280,000 x 1.4% = $3,920.
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Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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