You bought a house with a 30-year mortgage with loan size $500,000 and interest rate 6%. Assuming the total transaction cost is $4,000 and your marginal income tax rate is 30%. What is your tax deduction for the first 2 months? 99.25

You bought a house with a 30-year mortgage with loan size $500,000 and interest rate 6%. Assuming the total transaction cost is $4,000 and your marginal income tax rate is 30%. What is your tax deduction for the first 2 months? 99.25

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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Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

You bought a house with a 30-year
mortgage with loan size $500,000 and
interest rate 6%. Assuming the total
transaction cost is $4,000 and your
marginal income tax rate is 30%. What
is your tax deduction for the first 2
months?
99.25
2,997.75
2,987.75
4,997.51

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