Tennessee Real Estate Exam Practice Question
A house sells for $200000; buyer puts 20% down and finances 80%. Assessed value is $214000 and the tax rate is 3%. Annual property tax is
Correct Answer: C
Rationale: To calculate the annual property tax, first determine the assessed value of the house, which is $214,000. The tax rate is 3%, so the annual property tax is calculated as follows:
Annual Property Tax = Assessed Value × Tax Rate
= $214,000 × 0.03 = $6,420.
Option A ($6,000) underestimates the tax due to incorrect multiplication. Option B ($4,800) miscalculates the tax by applying a lower tax rate. Option D ($6,510) is also incorrect as it does not accurately reflect the 3% rate on the assessed value. Thus, $6,420 is the accurate annual property tax amount.
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