The tax rate on Ned Topolino's $112,000 vacation home is 25 mills. The property is assessed at full value. How much will Ned pay in taxes this year?


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Matt Domm answered
$28,000 is your answer. To figure out the amount Ned will pay in taxes for the year you must take $112,000 times 25 mills. You use the $112,000 because this is the home’s assessed value according to the information provided. As you can see from the question it said the house was assessed at full value. You also know the millage rate is 25 mills. Typically in a real situation you would have a mills rate that is a decimal rate meaning it is usually .02, .03 or something similar rather than a full 25 mills. Even if you were to convert 25 mills into a percentage it would still come out to the answer of $28,000.
The question is not complete here because answers were given with this question. You could choose from A. $28,000, B. $780, C. $7,800 and D. $2,800. The only answer you can obtain by the two numbers given in the question is A.
You can further divide this answer out if you want to know how much would be due monthly for Ned’s taxes. You would come up with $2,333 as the answer for a monthly payment. You arrive at this answer by taking $28,000 divided by 12 and this gives you the monthly payment amount.
In real life if you were doing this calculation your taxes would be based on the location of the vacation property. Each state, county and even city has a different valuation and different mills to be applied. It may seem like $28,000 is a high number and in reality it would most likely be excessive given the value of the home; however, it is the right answer for this example question.

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