On January 1, 2010, your brother's business obtained a 30-year amortized mortgage loan for $250,000 at a nominal annual rate of 7.0%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for 2010?
A) $17,419.55
B) $17,593.75
C) $17,769.68
D) $17,947.38
E) $18,126.85

Question

Quizplus · Accepted Answer

The correct answer is A.The interest tax deduction for 2010 is $17,419.55. This is calculated by multiplying the loan amount by the nominal annual interest rate and then dividing by 12 to get the monthly interest payment. The monthly interest payment is then multiplied by the number of months in the year to get the annual interest deduction.

On January 1, 2010, Your Brother's Business Obtained a 30-Year