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Jan sold her house on December 31 and took a $10,000 mortgage aspart of the payment. The 10-year mortgage has a 7% nominal interestrate, but it calls for semiannual payments beginning next June 30.Next year Jan must report on Schedule B of her IRS Form 1040 theamount of interest that was included in the two payments shereceived during the year.

A. How much interest was included in the first payment? Roundyour answer to the nearest cent.
$ ____________

How much repayment of principal was included? Round your answerto the nearest cent.
$ ____________

What is the dollar amount of each payment Jan receives? Roundyour answer to the nearest cent.
$ ______________

B. How much interest must Jan report on Schedule B for the firstyear? Round your answer to the nearest cent.
$ ___________________

Will her interest income be the same next year?

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Nelly Stracke
Nelly StrackeLv2
28 Sep 2019

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Jan sold her house on December 31 and took a $10,000 mortgage aspart of the payment. The 10-year mortgage has a 11% nominalinterest rate, but it calls for semiannual payments beginning nextJune 30. Next year Jan must report on Schedule B of her IRS Form1040 the amount of interest that was included in the two paymentsshe received during the year.

a. What is the dollar amount of each payment Jan receives? Roundyour answer to the nearest cent. $

b. How much interest was included in the first payment? Roundyour answer to the nearest cent. $ How much repayment of principalwas included? Round your answer to the nearest cent. $

How do these values change for the second payment? The portionof the payment that is applied to interest declines, while theportion of the payment that is applied to principal increases. Theportion of the payment that is applied to interest increases, whilethe portion of the payment that is applied to principal decreases.The portion of the payment that is applied to interest and theportion of the payment that is applied to principal remains thesame throughout the life of the loan. The portion of the paymentthat is applied to interest declines, while the portion of thepayment that is applied to principal also declines. The portion ofthe payment that is applied to interest increases, while theportion of the payment that is applied to principal also increases.c. How much interest must Jan report on Schedule B for the firstyear? Round your answer to the nearest cent. $

Jan bought her bought her house on december 31 and took a$10,000 mortgage as part of the payment. The 10-year mortgage has a10% nominal interest rate, but it calls for semiannal paymentsbuginning next June 30. Next year Jan must report on her Tax Formthe amount of annual interest payment that is included in her firsttwo payments during the year. a.) What is the dollar amount ofpayment? How much principal is included? b.) How much interest isincluded in the first payment? How much principal is included? c.)How much annual interest payment in total must Jan report on TaxForm for the first year (two payments total)? d.) The payment isconstant each time, why does the amount of interest payment changeover time?

Problem 5-22 Loan amortization Jan sold her house on December 31and took a $15,000 mortgage as part of the payment. The 10-yearmortgage has a 11% nominal interest rate, but it calls forsemiannual payments beginning next June 30. Next year Jan mustreport on Schedule B of her IRS Form 1040 the amount of interestthat was included in the two payments she received during theyear.

What is the dollar amount of eachpayment Jan receives?

Round your answer to the nearestcent.

How much interest was included inthe first payment?

Round your answer to the nearestcent.

How much repayment of principalwas included?

Round your answer to the nearestcent.

How do these values change forthe second payment?

The portion of the payment thatis applied to interest declines, while the portion of the paymentthat is applied to principal increases.

The portion of the payment thatis applied to interest increases, while the portion of the paymentthat is applied to principal decreases.

The portion of the payment thatis applied to interest and the portion of the payment that isapplied to principal remains the same throughout the life of theloan.

The portion of the payment thatis applied to interest declines, while the portion of the paymentthat is applied to principal also declines.

The portion of the payment thatis applied to interest increases, while the portion of the paymentthat is applied to principal also increases.

How much interest must Jan reporton Schedule B for the first year?

Round your answer to the nearestcent.

Will her interest income be thesame next year? If the payments are constant, why does the amountof interest income change over time?

As the loan is amortized (paidoff), the beginning balance, hence the interest charge, increasesand the repayment of principal increases

As the loan is amortized (paidoff), the beginning balance, hence the interest charge, declinesand the repayment of principal increases

As the loan is amortized (paidoff), the beginning balance, hence the interest charge, declinesand the repayment of principal declines

As the loan is amortized (paidoff), the beginning balance, hence the interest charge, increasesand the repayment of principal declines

As the loan is amortized (paidoff), the beginning balance declines, but the interest charge andthe repayment of principal remain the same.

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