View the step-by-step solution to:

Question

ou are about to buy a home. You know about tax consequences, and you know how to use Excel. The specifications on

your nice, new home loan are:

Purchase Price: 350000

Down Payment Percent: 20%

APR: 4.679%

Years: 25

Payments / Year: 12

PMT monthly payment: 1584.92


For the same home loan in Question 3,

bought the home on the last day of August, first payment is on the last day of September.

 

So in the first year, will make 4 payments (September, October, November, December), Months (or rather Payments) 1-4.

 

want to know the tax impact of this purchase because home mortgage interest is deductible on federal and state income taxes,

 

want to know what your total Year 4 interest payments will be. (The sum of your interest of your monthly payments for a given year.)

 

Assume that Year 1's payments were the first 4.

 

What are your cumulative interest payments in Year 4?

(TWO decimal places, NO commas, NO dollar signs ($))

 

Hints: You have to negate the function, not the PV; This is an End of Year computation. 

Top Answer

Cumulative Interest... View the full answer

19990945-1.PNG

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question