The tax rate on Jerome Jame's $112,000 vacation home is 25 mills. The property is assessed at full value. How much will Jerome pay in taxes this year? A. $780 B. $7,800 C. $2,800 D. $28,00?
Hello, As mention in the question, Tax Rate = 25 mills = 2.5 % (25/1000) Principal Amount = $112000 Period = Time = 1 year Thus we see this as a mathematical equation in the form of simple interest (SI) SI = (principal amount * tax rate * time) / 100 SI = (112000 * 2.5*1)/100 = $2800 Hope this helps to get your answer
Hello Diana. The Mills rate represents a figure amount per $1000 of the assessed value of the property (mills is derived from the Latin word "millesium" which means thousandth). The assessed value of the property is $112,000. The tax rate is 25 mills which means $25 per $1000. So the tax due is 25*112=$2800. Alternatively, one can think of 25 mills as a tax rate of 2.5% (25/1000 = 2.5/100). So now you just need to calculate 2.5% of $112,000 which is $2800. I hope this helps. Best wishes, Amir Saei
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