Bill is considering a home equity loan that has an 8.5% annual simple interest rate. His home has appraised for $191,000 and he still has a balance of $120,000 on his first mortgage.

A.) Computer 80% of the appraisal minus the balance of his first mortgage. This is called the loan to value ratio and is the amount that the bank will loan Bill as a home equity loan.

B.) Interest is paid yearly on a home equity loan and is tax deductible. How much will Bill be able to take as a tax deduction in a given year due to interest on the home equity loan?