Ask Question
5 April, 03:39

Your brothers business obtain a 30 year amortized mortgage loan for $300,000 nominal annual rate of 7% 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 one?

+2
Answers (1)
  1. 5 April, 04:08
    0
    246

    Explanation:

    The amount to be interest tax deductible is 246.

    This is the payment done against the loan. To calculate,

    F = C { [ (1 + i/n) ^t*n ] / i/n}

    Where, F = Loan, C = Payment, i = Interest Rate, t = Years, n = payments (Monthly, Quarterly etc.)

    C = $300,000 / { [ (1 + i/n) ^t*n ] / i/n}

    = $300,000 / { [ (1 + 0.07/12) ^30*12 ] / (.07/12) }

    = 246
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Your brothers business obtain a 30 year amortized mortgage loan for $300,000 nominal annual rate of 7% with 360 end of month payments the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers