A property is assessed at $250,000. The tax rate is $2.50 per $100. What is the annual tax?
Question & Answer
Review the question and all answer choices
$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.
$6,250
$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.
$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.
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