Real Estate Math
A Rhode Island property has a market value of $525,000. The assessed value is 80% of market value. The mill rate is 18 mills. What is the annual property tax? (1 mill = $1 per $1,000 of assessed value)
A$7,200
B$7,560✓ Correct
C$8,100
D$9,450
Explanation
Assessed value: $525,000 x 0.80 = $420,000. Tax: $420,000 / $1,000 x 18 = 420 x $18 = $7,560. To solve this, multiply the relevant values: $525,000 and $1 at 80%.. The correct answer is $7,560.. This is a common calculation on the Rhode Island real estate exam.
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