Question

A city has a total budget of $10 million per year. It brings in $3.5 million per year

in revenues other than property taxes. Therefore, the city must generate $6.5
million in property taxes to balance its budget. The net assessed valuation of all
property in that city is $825 million. What is the percent tax rate necessary to
generate the $6.5 million? Only use two decimal places and do not round.

Answer 1

0.78%

Explanation:

The percentage tax rate required is t such that ...

825t = 6.5 . . . . . milliions of dollars

t = 6.5/825

As a percentage, ...

t = 6.5/825 × 100% = 0.7878...% ≈ 0.78%

_____

Comment on rounding

Ordinarily, this value would be rounded to 0.79%. Property tax rates are often expressed in mils, or dollars per thousand. In that form, the tax rate would be 7.88‰ when rounded to two decimal places.