A municipality has a budget of $2,000,000. If the assessed value of all real estate within the tax district is $50,000,000, what is the tax rate?

A municipality has a budget of $2,000,000. If the assessed value of all real estate within the tax district is $50,000,000, what is the tax rate?

• A. $1.00 per $100 of assessed value
• B. $2.00 per $100 of assessed value
• C. $4.00 per $100 of assessed value
• D. $10 per $100 of assessed value

Answer: (C)

To determine the correct tax rate based on the provided budget and assessed value, one must first understand how to calculate the tax rate using the formula: Tax Rate = (Budget / Assessed Value) x 100. In this scenario, the municipality has a budget of $2,000,000 and an assessed value of $50,000,000. Using the formula, we calculate it as follows: Tax Rate = ($2,000,000 / $50,000,000) x 100 = 0.04 x 100 = 4.00 per $100 of assessed value. This calculation demonstrates that for every $100 of assessed value, property owners would owe a tax of $4.00 to meet the municipality's budget requirements. This explains why the answer indicating a tax rate of $4.00 per $100 of assessed value is correct.

To determine the correct tax rate based on the provided budget and assessed value, one must first understand how to calculate the tax rate using the formula:

Tax Rate = (Budget / Assessed Value) x 100.

In this scenario, the municipality has a budget of $2,000,000 and an assessed value of $50,000,000.

Using the formula, we calculate it as follows:

Tax Rate = ($2,000,000 / $50,000,000) x 100

= 0.04 x 100

= 4.00 per $100 of assessed value.

This calculation demonstrates that for every $100 of assessed value, property owners would owe a tax of $4.00 to meet the municipality's budget requirements. This explains why the answer indicating a tax rate of $4.00 per $100 of assessed value is correct.