Real Estate Math

Annual property taxes of $3,600 are prorated to closing on September 1. The seller is responsible for taxes through August 31. Using the statutory (360-day) year, how much does the seller owe?

A$2,200.00
B$2,300.00
C$2,400.00✓ Correct
D$2,430.00

Explanation

Using the 360-day (banker's) year with 30-day months: seller owes January through August = 8 months × 30 days = 240 days. Daily rate = $3,600 / 360 = $10.

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