Assume that you presently have a monthly mortgage on a rental property with a stated interest rate of 7% APR.If your income tax rate is 20%,then the after tax EAR for your mortgage on a rental property is closest to:

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C) Step #1 find the EAR EAR = (1 + .07 / 12)¹² - 1 = 7.2% Step #2 find the after tax cost after tax = before tax (1 - T) = .072 (1 - .2) = .0578 or approximately 5.8%

Assume That You Presently Have a Monthly Mortgage on a Rental