Your brother's business obtained a 30-year amortized mortgage loan for $400,000 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?

Question

Quizplus · Accepted Answer

The interest tax deduction for Year 1 is calculated by determining the total interest paid in the first year of the mortgage. Using the loan details, the monthly payment can be calculated, and then the interest portion of each payment for the first 12 months is summed up to find the total interest paid in Year 1, which is $27,871.28.

Your Brother's Business Obtained a 30-Year Amortized Mortgage Loan for $400,000