Ch 05: End-of-Chapter Problems-Time Value of Money R Problem Walk-Through Jan sold her house on December 31 and took a $20,000 mortgage as part of the payment. The 10-year mortgage has a 6% nominal interest rate, but it calls for semiannual payments beginning next June 30, Next year Jan must report on Schedule of her IRS Form 1040 the amount of interest that was included in the two payments she received during the reac a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cont $ b. How much interest was included in the first payment? Round your answer to the nearest cent How much repayment of principel was included? Do not round intermediate calculations. Round your answer to the nearest cent How do these values change for the second payment? 1. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal increases II. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to prinopal decreases 1. The portion of the payment that is applied to interest and the portion of the payment that is applied to principal remains the same throughout the life of the loan. IV. The portion of the payment that is applied to interest dedines, while the portion of the payment that is applied to principal also decines. V. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal also increases How much interest must Jan report on Schedule for the first year? Do not round intermediate calculations. Round your answer to the nearest cent Wis her interest incume be the same next year? d. If the payments are constant, why does the amount of interest income change over time? 1. As the san is amortued (paid off), the beginning balance, hence the interest charge, increases and the repayment of principal increases. 11. As the loan is amortized (ped off), the beginning balance, hence the interest charge, decines and the repayment of principal increases. III. As the inan is amortized (paid off), the beginning balance, hence the interest charge, decines and the repayment of principal declines IV. As the loan is amortized (paid off), the beginning balance, hence the interest charge, increases and the repayment of principal declines. V. As the loan is amortired (paid off), the beginning balance decines, but the interest charge and the repayment of principal remain the same