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 Year 1?

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Quizplus · Accepted Answer

The correct answer is A because the interest tax deduction for Year 1 is $17,419.55. This can be calculated using the following formula:Interest tax deduction = Loan amount * (Interest rate / 12) * (1 - Tax rate)In this case, the loan amount is $250,000, the interest rate is 7.0%, and the tax rate is 35%. Plugging these values into the formula, we get:Interest tax deduction = $250,000 * (0.07 / 12) * (1 - 0.35) = $17,419.55

Your Brother's Business Obtained a 30-Year Amortized Mortgage Loan for $250,000