Question

Help plz Lucia and Randy have signed a contract to purchase a home. The closing date is March 27, a

the buyer owns the property on the day of closing. The selling price of the home is $852,500

Lucia and Randy obtained a fixed-rate mortgage from a bank for $665,000 at 7.55% interest

The seller has already paid $15,378.15 in property taxes for the coming year. How much will

Lucia and Randy owe in prorated expenses?

Answer 1

Lucia and Randy will owe $3,585.30 in prorated expenses for the property taxes

Step-by-step explanation:

In order to calculate the prorated expenses for Lucia and Randy, we need to determine the number of days they will own the property before the seller's payment for property taxes expire.

First, we need to find the number of days between the closing date (March 27) and the end of the property tax period. Let's assume the property tax period is from January 1 to December 31.

The number of days between January 1 and March 27 is 85 (January has 31 days, and February has 28 days in a non-leap year).

Next, we need to calculate the percentage of the property taxes Lucia and Randy will owe for the time they own the property. Since the full property tax amount is $15,378.15, and there are 365 days in a year, the daily amount of property taxes is $42.18.

Finally, we can calculate the prorated expenses by multiplying the daily property tax amount by the number of days Lucia and Randy will own the property. So, the prorated expenses will be $42.18 * 85 = $3,585.30.