Jan soid her house on December 31 and took a $10,000 mortgage as part of the payment. The 10 -year mortgage has an 8% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule 8 of her las Form 1040 the amount of interest that was included in the two payments she recelved durin the year, a. What is the dollar amount of each poyment Jan recelves? Round your answer to the nearest cent. 5 b. How much interest was included in the first payment? Round your answer to the nearest cent. 5 How much repayment of principal was induded? Do not round intermediate caiculations. Round your answer to the nearest cent. 3. How do these values change for the second payment? 1. The portion of the payment that is applied to interest decines, whice the portion of the payment ehat is applied to prinopal iacreaset. II. The portion of the payment that is applied to interest increases, while the portion of the payment that is appled to principal decreases. IIt. The portion of the payment that is apolied to interest and the portion of the payment that is applied to principat remains the same throughout the ufe of the loan. IV. The portion of the payment that is applied to interest decines, nivie the portion of the payment that is appled to peinipal also decines. v. The porton of the payment that is apglied to interest increases, while the portion of the payment that is applied to principal aise incresses. c. How much interess must jan report on Schedule a for the first year? Do not round intermediate calculations. Aound vour answer to tho rieartit cent. 3 Wili her interest income be the same next ves? 6. It the osyments are constant, why does the amount of intereut hoome change vver time? How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent: 3) 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 principal decreases. 111. 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 IV. The portion of the payment that is applied to interest decines, while the portion of the payment that is applied to principal also declines. 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. c. How much interest must Jan report on. Schedule B for the first year? Do not round intermediate calculations. Round your answer to the nearest cent. 4 Will her interest income be the same next year? d. If the payments are constant, why does the amount of interest income change over time? 1. As the loan is amortized (paid off), the beginaing balance, hence the interest charge, increases and the repayment of principal increases. 1t. As the toan is amortized (pald off), the beginning balancezhence the interest charge, declines and the repayment of principai increases. III. As the loan is amortized (paid off), the beginning balance, hence tho interest charge, declines and the repayment of principal declines. N. As the loan is amortized (paid off), the beginning balance, hence the interest charge, increases and the repayment of principal dedines: V. As the toan is amortized (paid off), the beginning balance decines, but the interest charge and the repayment of principal temain the same