Question

On January 1, 2013, your brother's business obtained a 30-year amortized mortgage loan for $350,000 at a nominal annual rate of 7.35%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for 2014 (sencond year mortgage interest expense)?

Calculate using at least 4 decimal points and round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72 in the answer box provided.

Calculate using at least 4 decimal points and round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72 in the answer box provided.

A. $23,079.40

B. $25,869.22

C. $24,601.12

D. $26,883.70

E. $25,361.98

Step 1

We can find the interest expenses for the year 2014 by accumulating the interest portion of each fo themonthly payment from period number 13 to period no. 24. We will make use of the excel function CUMIPMT.

Step 2

Please see the white board. Please be guided by the last column to understand the mathematics. The cells highlighted in yellow contain your answer. Figures in pa...

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