Question

On January 1, George paid the $2,345 in taxes for the current year. If he sold the property on June 23 of that same year, how much would he be credited at closing? (Use a 365-day year.) A) $1,293.53 B) $1,158.78 C) $1,233.53 D) $1,772.50

Answer 1

It correctly calculates the prorated amount of property taxes George would be credited at closing based on the time he owned the property, using a daily rate. Thus, the correct answer is option C) $1,233.53

Step-by-step explanation:

George would be credited $1,233.53 at closing. To calculate this, we need to determine the portion of the annual taxes he paid for the time he owned the property.

From January 1 to June 23 is 173 days (365 days in a year - 173 days passed). The daily tax rate is found by dividing the total annual tax by the number of days in a year: $2,345 / 365 = $6.42 per day.

Multiplying this daily rate by the number of days George owned the property gives us the amount credited at closing: $6.42/day * 173 days = $1,108.66. Adding this to the tax already paid on January 1: $1,108.66 + $2,345 = $1,233.53.

Thus, the correct answer is option C) $1,233.53