John and Mary Billings own a condominium with an acid value of 110000 if the tax rate is 25 meals per dollar off the valuation how much tax do they pay
The Correct Answer and Explanation is:
To calculate the property tax that John and Mary Billings must pay, we need to understand the terms used:
Step-by-Step Calculation
- Assessed Value of Property: $110,000
- Tax Rate: 25 mills per dollar of assessed value
Understanding Mills:
- 1 mill = $0.001
- So, 25 mills = 25 × $0.001 = $0.025 per dollar
Tax Calculation:Tax=Assessed Value×Tax Rate (in dollars)\text{Tax} = \text{Assessed Value} \times \text{Tax Rate (in dollars)} Tax=Assessed Value×Tax Rate (in dollars)Tax=110,000×0.025=2,750\text{Tax} = 110,000 \times 0.025 = 2,750 Tax=110,000×0.025=2,750
✅ Answer: $2,750
Explanation
John and Mary Billings own a condominium valued at $110,000 for tax purposes. In property taxation, the government uses a system called “millage rate” to determine how much tax property owners owe. A mill is a unit that equals one-thousandth of a dollar, or $0.001. In this scenario, the tax rate is 25 mills per dollar of assessed value.
To calculate the tax using mills, we convert the mill rate into dollars. Since 1 mill equals $0.001, 25 mills equals 25 × $0.001, which is $0.025. This means that for every dollar of assessed value, the Billings must pay 2.5 cents in tax.
Now, multiply the assessed value of the condominium, which is $110,000, by the tax rate of $0.025 per dollar:110,000×0.025=2,750110,000 \times 0.025 = 2,750110,000×0.025=2,750
This results in a tax amount of $2,750.
This property tax is likely used by the local government to fund public services such as schools, road maintenance, police and fire departments, and other municipal needs. The assessed value represents the worth of the property as determined by a public tax assessor, and the mill rate is set by the local governing body.
Understanding millage rates is essential for property owners because small differences in mill rates can lead to significant differences in tax liability. Here, 25 mills is a moderately standard rate, and for a property assessed at $110,000, it results in a manageable annual tax bill of $2,750.
