Future Business Leaders of America (FBLA) Business Calculations Practice Test

If a house has a property value of $175,000 and a tax rate of $2.50 per thousand, how much property tax is due?

1. $500.00

2. $700.00

3. $142.85

4. $437.50

The correct answer is: $437.50

To determine the property tax due on a house valued at $175,000 with a tax rate of $2.50 per thousand dollars, it's important to first understand how to calculate the property tax based on the assessed value and the tax rate. 1. **Identify the property value and tax rate**: The property's value is $175,000, and the tax rate is $2.50 per $1,000. This means for every $1,000 of the property's value, $2.50 will be charged as tax. 2. **Calculate the tax per thousand**: First, convert the property's value to thousands. You can do this by dividing the value by 1,000: \[ 175,000 \div 1,000 = 175 \] 3. **Calculate the total tax**: Now, multiply the number of thousands by the tax rate: \[ 175 \times 2.50 = 437.50 \] So, the property tax due is $437.50. This calculation confirms that the correct answer is indeed the amount calculated, reflecting the necessary arithmetic steps involved. Understanding this process not only allows one to explore property taxes effectively but also