Mr. Brown owned a house which he rented for $60 a month. The house was assessed at $9000. In 1975 the rate of taxation was increased from $25 to $28 per $1000 assessed valuation. By what amount should the monthly rent have been raised to absorb the increase in that year's taxes?

Question

Mr. Brown owned a house which he rented for $60 a month. The house was assessed at $9000. In 1975 the rate of taxation was increased from $25 to $28 per $1000 assessed valuation. By what amount should the monthly rent have been raised to absorb the increase in that year's taxes?

A. $7.20
B. $2.25
C. $21
D. None of these answers

Answer 1

To calculate the monthly rent increase needed to absorb the increase in taxes, we first need to find the increase in taxes due to the change in the tax rate.

1. Calculate the initial tax amount:
Tax = ($25 per $1000) * (Assessed Valuation / $1000)
Tax = ($25/$1000) * $9000
Tax = $225

2. Calculate the new tax amount:
New Tax = ($28 per $1000) * (Assessed Valuation / $1000)
New Tax = ($28/$1000) * $9000
New Tax = $252

3. Calculate the difference in taxes:
Tax Increase = New Tax - Tax
Tax Increase = $252 - $225
Tax Increase = $27

Now that we know the increase in taxes, we can find the monthly rent increase needed to cover it.

4. Calculate the monthly rent increase:
Rent Increase = Tax Increase / 12 (since taxes are paid monthly)
Rent Increase = $27 / 12
Rent Increase ≈ $2.25

Therefore, the monthly rent should have been raised by $2.25 to absorb the increase in that year's taxes.

The correct answer is B. $2.25.

Answer 2

To find the amount by which the monthly rent should have been raised to absorb the increase in that year's taxes, we need to determine the increase in taxes and then divide it by the 12 months in a year.

First, let's find the increase in taxes per $1000 assessed valuation:
Increase in taxes = New tax rate - Old tax rate
= $28 - $25
= $3

Next, we need to find the assessed valuation amount that corresponds to the monthly rent:
Assessed valuation = House rent / Monthly rental rate
= $9000

Now, we can calculate the increase in taxes for the assessed valuation amount:
Increase in taxes = Increase in taxes per $1000 assessed valuation * Assessed valuation (in $1000s)
= $3 * ($9000 / $1000)
= $3 * 9
= $27

Finally, let's calculate the amount by which the monthly rent should have been raised:
Amount = Increase in taxes / Number of months
= $27 / 12
≈ $2.25

Therefore, the monthly rent should have been raised by approximately $2.25 to absorb the increase in that year's taxes.
The answer is B. $2.25.

Answer 3

Mr. Brown owned a house which he rented for $60 a month. The house was assessed at $9000. In 1975 the rate of taxation was increased from $25 to $28 per $1000 assessed valuation. By what amount should the monthly rent have been raised to absorb the increase in that year's taxes?

To calculate the monthly rent increase needed to absorb the increase in taxes, we first need to find the increase in taxes due to the change in the tax rate.

To find the amount by which the monthly rent should have been raised to absorb the increase in that year's taxes, we need to determine the increase in taxes and then divide it by the 12 months in a year.

(3 * 9) / 12 = $2.25