This question is split. See attachment for full questions. Please answer a and b (if you can't answer b3, its fine.) Jan sold her house on December 31 and took a $40,000 mortgage as part of the payment. The 10-year mortgage has an 11% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year. a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent. _________ b1 How much interest was included in the first payment? Round your answer to the nearest cent. ___________ b2 How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent. _________ b3 How do these values change for the second payment? -Select- the correct option. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal increases. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal decreases. The portion of the payment that is applied to interest and the portion of the payment that is applied to principal remains the same throughout the life of the loan. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal also declines. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal also increases.
This question is split. See attachment for full questions. Please answer a and b (if you can't answer b3, its fine.) Jan sold her house on December 31 and took a $40,000 mortgage as part of the payment. The 10-year mortgage has an 11% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year. a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent. _________ b1 How much interest was included in the first payment? Round your answer to the nearest cent. ___________ b2 How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent. _________ b3 How do these values change for the second payment? -Select- the correct option. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal increases. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal decreases. The portion of the payment that is applied to interest and the portion of the payment that is applied to principal remains the same throughout the life of the loan. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal also declines. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal also increases.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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This question is split. See attachment for full questions. Please answer a and b (if you can't answer b3, its fine.)
Jan sold her house on December 31 and took a $40,000 mortgage as part of the payment. The 10-year mortgage has an 11% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year.
a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent. _________
b1 How much interest was included in the first payment? Round your answer to the nearest cent. ___________
b2 How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent. _________
b3 How do these values change for the second payment?
-Select- the correct option.
- The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal increases.
- The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal decreases.
- The portion of the payment that is applied to interest and the portion of the payment that is applied to principal remains the same throughout the life of the loan.
- The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal also declines.
- The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal also increases.
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