Real Estate Math
A New Mexico property owner pays $4,200 in annual property taxes. If the assessment ratio is 1/3 and the tax rate is 28 mills, what is the market value?
A$400,000
B$450,000✓ Correct
C$500,000
D$550,000
Explanation
Tax = Assessed Value × Tax Rate. $4,200 = AV × 0.028. AV = $4,200 / 0.028 = $150,000. Market Value = AV × 3 = $150,000 × 3 = $450,000.028 = $5,357,142. AV = $4,200 / 0.028 = $150,000. MV = $150,000 × 3 = $450,000.
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