Question
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 a 10%
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 a 10% nominal interest rate, but it calls for semiannal payments buginning next June 30. Next year Jan must report on her Tax Form the amount of annual interest payment that is included in her first two payments during the year. a.) What is the dollar amount of payment? How much principal is included? b.) How much interest is included in the first payment? How much principal is included? c.) How much annual interest payment in total must Jan report on Tax Form for the first year (two payments total)? d.) The payment is constant each time, why does the amount of interest payment change over time?
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