6. Loan Amortization Assume that your aunt sold her house on December 31, and to help close the sale she took a second mortgage in the amount of $30,000 as part of the payment. The mortgage has a quoted (or nominal) interest rate of 12%; it calls for payments every 6 months, beginning on June 30, and is to be amortized over 10 years. Now, 1 year later, your aunt must inform the IRS and the person who bought the house about the interest that was included in the two payments made during the year. (This interest will be income to your aunt and a deduction to the buyer of the house.) To the closest cent, what is the total amount of interest that was paid during the first year? Do not round intermediate calculations. Round your answer to the nearest cent. $
6. Loan Amortization Assume that your aunt sold her house on December 31, and to help close the sale she took a second mortgage in the amount of $30,000 as part of the payment. The mortgage has a quoted (or nominal) interest rate of 12%; it calls for payments every 6 months, beginning on June 30, and is to be amortized over 10 years. Now, 1 year later, your aunt must inform the IRS and the person who bought the house about the interest that was included in the two payments made during the year. (This interest will be income to your aunt and a deduction to the buyer of the house.) To the closest cent, what is the total amount of interest that was paid during the first year? Do not round intermediate calculations. Round your answer to the nearest cent. $
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 61P
Related questions
Question
Transcribed Image Text:6. Loan Amortization
Assume that your aunt sold her house on December 31, and to help close the sale she took a second
mortgage in the amount of $30,000 as part of the payment. The mortgage has a quoted (or nominal)
interest rate of 12%; it calls for payments every 6 months, beginning on June 30, and is to be amortized
over 10 years. Now, 1 year later, your aunt must inform the IRS and the person who bought the house
about the interest that was included in the two payments made during the year. (This interest will
be income to your aunt and a deduction to the buyer of the house.) To the closest cent, what is the
total amount of interest that was paid during the first year? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you