If the assessment level is 30% of appraised value and the current tax rate is $8.50 per hundred, what is the effective tax rate expressed as a decimal?

If the assessment level is 30% of appraised value and the current tax rate is $8.50 per hundred, what is the effective tax rate expressed as a decimal?

• A. 0.0255
• B. 0.0850
• C. 0.0300
• D. 0.0250

Answer: (A)

To determine the effective tax rate expressed as a decimal, you first need to understand the relationship between the assessment level, the appraised value, and the tax rate. The assessment level in this case is 30% of the appraised value. This means that for taxation purposes, only 30% of the property’s appraised value will be used to calculate the tax. The current tax rate is provided as $8.50 per hundred dollars of value. To convert this into a decimal for effective tax rate calculations, you first convert the rate per hundred into a rate per dollar. Since $8.50 is given for every $100, it can be expressed as: \( \text{Tax Rate per Dollar} = \frac{8.50}{100} = 0.085 \) Next, to find the effective tax rate, we take into account that taxes are only assessed on 30% of the appraised value. Thus, you multiply the tax rate by the assessment level: \( \text{Effective Tax Rate} = \text{Tax Rate per Dollar} \times \text{Assessment Level} \) \( \text{Effective Tax Rate} = 0.085 \times 0.30

To determine the effective tax rate expressed as a decimal, you first need to understand the relationship between the assessment level, the appraised value, and the tax rate.

The assessment level in this case is 30% of the appraised value. This means that for taxation purposes, only 30% of the property’s appraised value will be used to calculate the tax.

The current tax rate is provided as $8.50 per hundred dollars of value. To convert this into a decimal for effective tax rate calculations, you first convert the rate per hundred into a rate per dollar. Since $8.50 is given for every $100, it can be expressed as:

( \text{Tax Rate per Dollar} = \frac{8.50}{100} = 0.085 )

Next, to find the effective tax rate, we take into account that taxes are only assessed on 30% of the appraised value. Thus, you multiply the tax rate by the assessment level:

( \text{Effective Tax Rate} = \text{Tax Rate per Dollar} \times \text{Assessment Level} )

( \text{Effective Tax Rate} = 0.085 \times 0.30