Exercise 10-21 (Algorithmic) (LO. 5, 8) The Wilmoths plan to purchase a house but want to determine the after-tax cost of financing its purchase. Given their projected taxable income, the Wilmoths are in the 24% Federal income tax bracket and the 8% state income tax bracket (i.e., an aggregate marginal tax bracket of 32%). Assume that the Wilmoths will benefit from itemizing their deductions for both Federal and state purposes. The total cash outlay during the first year of ownership will be $38,200 ($3,820 principal payments, $34,380 qualified residence interest payments).

If required, round your interim calculation to nearest dollar.

As a result, the initial year after-tax cost of financing the purchase of the home will be .....