Essay
A seller has prepaid both taxes and insurance on property about to be transferred. The taxes are $12,000 per year, and the insurance premiums are $2,400 per year. The seller prepaid both in January for the entire year through December 31. The closing on the property will take place on March 15, and the parties wish to know what formulas can be used to prorate these prepaids. Explain the results to them under both the 360-day-year and the 365-day-year formulas.
Correct Answer:
Verified
Correct Answer:
Verified
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