Annual property taxes are $1,776. the previous year's taxes are paid. if the closing is one may 1, what is the seller's portion on the settlement?

The correct answer is ($596.93 with a year of 360 days) or ($588.75 with a year of 365 days)

Explanation:

First step: Divide the annual property taxes into the number of days in a year.

$1,776 ÷ 360 days = 4.9333 (price per day, With a year of 360 days)

$1,776 ÷ 365 days = 4.8657 (price per day, With a year of 365 days)

Second step: Multiply the price per day by the number of days of the closing, for this case May 1

Jan= 31 days

Feb= 28 days

March= 31 days

April= 30 days

May= 30 days (but the closing is on 1 May, for this month, count just 1 day)

= 31 (Jan) + 28 (Feb) + 31 (March) + 30 (April) + 1 (May) = 121 days until May 1

Third step: Price per day x number of days until closing

$4.9333 x 121 days = $ 596.93

$4.8657 x 121 days = $ 588.75

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