Expert: Josh - 1/25/2010

Question
QUESTION: Hello:

This is a question regarding my previous questions pertaining to mills. I was not allowed to submit another question to you from my previous questions.

See the URL regarding my questions if necessary:
http://en.allexperts.com/q/Basic-Math-657/2010/1/Mills-Property-Taxes.htm

My question:

If I understand correctly, you believe that a mill is like a percentage sign (%). So, 5 mills is 5/1000 just as 5 percent is 5/100.  

Do I understand your explanation of a mill correctly?

I thank you for your reply.

ANSWER: Yes, you finally get it:)

"mills" is not a denomination, it is not a novel currency unit. It simply denotes 1/1000 of a unit in the metric (decimal) system.

Although "mills" is used in commerce/finance, it actually derives from "mille" in Latin. Any time we append "milli-" [French origin] as a prefix to a unit, we automatically scale the unit down by a thousand.

Hence, we have "milli-meter", "milli-Liter" and so forth.
e.g., 5 millimeter is simply 5/1000 of a meter.

---------- FOLLOW-UP ----------

QUESTION: Hello:

I want to thank you for your help and assistance with this topic.

Mills are usually converted to dollars. For example, if the tax rate for a certain community is 34.5 mills per dollar of assessed value, find the amount of tax one would pay if his property is assessed at $4000.00.

34.5 mills equals $0.0345, but I am not sure how to convert the mills to dollars.

A book that I read indicates to divide 34.5 mills by 1000 and attach a dollar sign.  I am confused by this guideline. Why just simply attach a dollar sign? Is there a mathematical reason?

Solution: Divide $4000.00 by $1.00 multiply $0.0345 by 4000.

But as I indicated what is the reasoning for attaching a dollar sign to the 0.0345?

I thank you for your reply and explanation.  

Answer
Hi Kenneth,

The word "mill" is actually used as a prefix to a unit. Its role is to scale a unit by 1/1000.

Wherever a question asks you to translate X "mills" into dollars, it must also specify a dollar figure (say, Y [dollar]). The calculation is simply Y [dollar] * (X/1000). You inherit the unit [dollar] from the figure associated with Y, not from X.

To make this clear,
34.5 "mille" is, by definition, 34.5 "milli-unit" in general.
34.5 "milli-unit" is equivalent to 34.5/1000 = 0.0345 unit.

In taxation, the unit you are using is a dollar, so 34.5 mills is "translated" to $0.0345. This is exactly what is described in the book.

If all your calculations are concerned with money, you can think of 1 mill as 1 "milli-dollar". For someone living in Europe, they can think of 1 mill as 1 milli-Euro.