Real Estate Math
A Pennsylvania home purchased for $250,000 is assessed at 75% of market value. The local millage rate is 40 mills. What is the annual property tax?
A$5,000
B$7,500✓ Correct
C$10,000
D$3,750
Explanation
Assessed value = $250,000 × 75% = $187,500. Tax = $187,500 × 40 mills = $187,500 × 0.040 = $7,500. Pennsylvania properties are assessed at a percentage of market value that varies by county, and taxes are calculated by multiplying assessed value by the millage rate.
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