Javier and Anita Sanchez purchased a home on January 1, 2021, for $852,000 by paying $284,000 down and borrowing the remaining $568,000 with a 7 percent loan secured by the home. The loan requires interest-only payments for the first five years. Javier and Anita file a joint return, have great eyesight, and are under 60 years of age. The interest expense is their only itemized deduction for the year. Their marginal tax rate is 32 percent. What is the after-tax cost of their 2021 interest expense? (Round your intermediate calculations and the final answer to the nearest whole dollar amount.) After-tax cost of the interest expense

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Javier and Anita Sanchez purchased a home on January 1, 2021, for $852,000 by paying $284,000 down and borrowing the
remaining $568,000 with a 7 percent loan secured by the home. The loan requires interest-only payments for the first five years.
Javier and Anita file a joint return, have great eyesight, and are under 60 years of age. The interest expense is their only itemized
deduction for the year. Their marginal tax rate is 32 percent. What is the after-tax cost of their 2021 interest expense? (Round your
intermediate calculations and the final answer to the nearest whole dollar amount.)
After-tax cost of the interest expense
Transcribed Image Text:Javier and Anita Sanchez purchased a home on January 1, 2021, for $852,000 by paying $284,000 down and borrowing the remaining $568,000 with a 7 percent loan secured by the home. The loan requires interest-only payments for the first five years. Javier and Anita file a joint return, have great eyesight, and are under 60 years of age. The interest expense is their only itemized deduction for the year. Their marginal tax rate is 32 percent. What is the after-tax cost of their 2021 interest expense? (Round your intermediate calculations and the final answer to the nearest whole dollar amount.) After-tax cost of the interest expense
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