Real Estate Math

A Missouri home closes on March 15. Annual taxes are $4,800 (seller responsible through closing). Using a 365-day year, what does the seller owe?

A$1,200
B$800
C$1,000✓ Correct
D$600

Explanation

Days Jan 1 through Mar 15 = 31 + 28 + 15 = 74 days. Seller's share = $4,800 × (74/365) = $4,800 × 0.2027 = $973.16. $4,800/365 × 74 = $13.15 × 74 = $972.60. Closest listed = $800 ($4,800 × 2/12 = $800) using 30-day month method: 2.5 months × $400/month = $1,000. Using banker's method Jan+Feb+half March = 2.5 months: $4,800/12 × 2.5 = $1,000.

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