In one country, property is assessed at 45% of market value with a tax rate of 35.8 mills. Ia a second country, property is assessed at 33 % of market value with a tax rate of 43.6 mills. If you had $100,000 to spend on a house, which country would charge the lower property tax? Find the annual amount saved.

Have you done the math to calculate the tax bills on a $100,000 house? What did you get?

100,000 x 45% x .358 = 16110
100,000 x 33% x .436 = 14388

16110 - 14388 = 1722.
My choices are as follow

A. 1st country, $172.20
B. 1st country, 1722.00
C. 2nd country, 1722.00
D. 2nd country, 172.20.

My GUESS is B. but is only a guess.

You found the 1st country would have a tax bill of $16,110 and the 2nd a bill of $14,388. You are asked which one has the lower tax bill - why would you think it's the 1st country?

Quote:

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Originally Posted by ebaines

Yuo found the 1st country would have a tax bill of $16,110 and the 2nd a bill of $14,388. You are asked which one has the lower tax bill - why would you think it's the 1st country?

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After looking over the problem and pondering about the whole thing it appears to me it would be D 2nd country.

I believe you are correct. The trick here is understsand what "mill rate" means - it's dollars of tax per $1000 of assessed value. For example the 1st country taxes using an assessed value of $100K x 45% = $45K, and the tax bill is $45K x 35.8 $/$K = $1611.

Quote:

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Originally Posted by ebaines

I believe you are correct. The trick here is understsand what "mill rate" means - it's dollars of tax per $1000 of assessed value. For example the 1st country taxes at an assessed value of $100K x 45% = $45K, and the tax bill is $45K x 35.8 $/$K = $1611.

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Thank you I was confused at the way the problem was written. Sometimes just putting it away for awhile and going back with a fresh mine works wonders. Thank you.