Carol Jones, a single person, has an annual income of $32,200. The principal and interest payment on the $25,000 loan (30 years at 8%) for her condominium is $7.34 per $1000. Annual property taxes are $1,200 and insurance is $280 a year.

Ms. Jones would like to purchase a larger unit in a new high rise, but her monthly principal and interest will increase to $330.30, plus annual taxes will be $2,100. Interest on the $45,000 will be 8% as rates are lower than when she purchased her present condominium.

In 200-250 words, given Ms. Jones' situation as described here, answer and discuss the following:

• What amount is deductible on the interest Ms. Jones currently pays if she is in the 28% tax bracket?
• If Ms. Jones purchases the new condominium, how would this affect her income tax? Analyze the investment from the perspective of tax savings.
• What should Ms. Jones consider before making this decision?
• What calculations should Ms. Jones make?
• What other savings would Ms. Jones realize?