1. A property is assessed at $200,000 and the tax rate is $2.50 per $100 of assessed value. What is the annual tax?
Answer & explanation
Answer: D. $200,000 / 100 = 2,000 units; 2,000 x $2.50 = $5,000.
valuation
tax rate
The rate applied to a property's assessed value to determine the property tax owed. It may be expressed as a percentage, as dollars per hundred dollars of assessed value, or in mills (tenths of a cent). Local taxing bodies set their rates based on budget needs divided by the total assessed value in the jurisdiction. Methods vary by state.
- Exam tip
- Tax equals assessed value times tax rate. Convert carefully: 25 mills equals $0.025 per dollar, or $25 per $1,000.
- Example
- A home assessed at $200,000 with a tax rate of 30 mills owes $6,000 in annual property tax.
Related terms & state variants
Sources
Source verification pending. Confirm current requirements with your state regulator.
Last verified: 2026-10-23