The mortgage has quoted interest rate

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Reference no: EM131296527

Assume that your aunt sold her house on December 31, and that she took a mortgage in the amount of $10,000 as part of the payment. The mortgage has a quoted (or nominal) interest rate of 10 percent, but it calls for payments every 6 months, beginning on June 30, and the mortgage is to be amortized over 10 years. Now, one year later, your aunt must file Schedule B of her tax return with the IRS, informing them of the interest that was included in the 2 payments made during the year. (This interest will be income to your aunt and a deduction to the buyer of the house.) To the closest dollar, what is the total amount of interest that was paid during the first year?

Reference no: EM131296527

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