EstatePass
Real Estate MathMEDIUMFREE

A property is assessed at $250,000. The tax rate is $2.50 per $100. What is the annual tax?

2:50
0 views

Question & Answer

Review the question and all answer choices

A

$5,000

Answer A ($5,000) results from incorrectly multiplying $250,000 × $0.02 or using a misremembered rate; it skips the critical step of dividing by 100 before applying the $2.50 rate.

B

$6,250

Correct Answer
C

$7,500

Answer C ($7,500) is a common arithmetic error that may result from using a rate of $3.00 per $100 instead of $2.50, or from incorrectly setting up the proportion entirely.

D

$2,500

Answer D ($2,500) represents only the number of $100 units in the assessed value (2,500) without completing the second step of multiplying by the $2.50 tax rate — a classic incomplete-calculation error.

Why is this correct?

The correct answer is B ($6,250) because the formula requires dividing the assessed value by 100 first: $250,000 ÷ $100 = 2,500 units. Then multiply those units by the tax rate of $2.50: 2,500 × $2.50 = $6,250. This two-step process correctly applies the 'per $100 of assessed value' rate structure used throughout Texas.

Ready to Ace Your Real Estate Exam?

Access 2,000+ free video lessons covering all 11 exam topics.