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Your brothers business obtain a 30 year amortized mortgage loan for $300,000 nominal annual rate of 7% with 360 end of month payments the firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for year one?

Respuesta :

abduljawad

Answer:

246

Explanation:

The amount to be interest tax deductible is 246.

This is the payment done against the loan. To calculate,

F = C { [ (1+ i/n) ^t*n ] / i/n}

Where, F= Loan, C = Payment, i = Interest Rate, t= Years, n = payments (Monthly, Quarterly etc.)

C = $300,000 / { [ (1+ i/n) ^t*n ] / i/n}

  = $300,000 / { [ (1+ 0.07/12) ^30*12 ] / (.07/12)}

  = 246

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