How much interest was included in the first payment
Course:- Finance Basics
Reference No.:- EM13298435

Assignment Help
Assignment Help >> Finance Basics

Jan sold her house on December 31 and took a $10,000 mortgage as part of the payment. The 10-year mortgage has a 10% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS form 1040 the amount of interest that was included in the two payments she received during the year.

a. What is the dollar amount of each payment Jan receives?

b. How much interest was included in the first payment? How much repayment of principal was included? How do these values change for the second payment?

c. How much interest must Jan report on Schedule B for the first year? Will her interest income be the same next year?

d. If the payments are constant, why does the amount of interest income change over time?


Put your comment

Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
The federal government has considered eliminating the tax deductiblity of mortgage interest. If a bill came before Congress, would you support it? What are your thoughts o
FINC20019: Assessment Task: Individual Assignment. Please read EXTENDED LEARNING from page 127 to 131of the prescribed textbook (7th edition) on project finance. Define projec
One of the factors that determines cost of Homeowners insurance is location. Many areas of our country are exposed to severe weather, such as hurricanes, tornadoes, etc. Sho
A stock is expected to pay a dividend of $2 the end of the year (that is, D1=$2), and it should continue to grow at a constant rate of 4% a year. If its required return is 1
If she pays off the loan in 36 months, what are her monthly payments? If she makes a down payment of $220, how much will her monthly payments be? Do not round until the fina
The following equation can, under certain assumptions, be used to forecast financial requirements: Under what conditions does the equation give satisfactory predictions, and w
Prepare a Schedule of Collections and Payments for the six month period beginning in March, using the template provided and the data above. Prepare a Schedule of Cash Surplus
De?ne an explanatory variable x to have the value 1 for high-tech ?rms and 0 for non-high-tech ?rms. For the logistic model, we set the log odds equal to β0 + β1 x. Find the