Javier and Anita Sanchez purchased a home on January 1, 2022, for $804,000 by paying $268,000 down and borrowing the remaining $536,000 with a 7 percent loan secured by the home. The loan requires interest-only payments for the first five years. The Sanchezes would itemize deductions even if they did not have any deductible interest. The Sanchezes' marginal tax rate is 32 percent.

Required:

a.What is the after-tax cost of the interest expense to the Sanchezes in 2022?

Note: Round your intermediate calculations to the nearest whole dollar amount.

b. Assume the original facts, except that the Sanchezes rent a home and pay $37,520 in rent during the year. What is the after-tax cost of their rental payments in 2022?

c. Assuming the interest expense is their only itemized deduction for the year and that Javier and Anita file a joint return, have great eyesight, and are under 60 years of age, what is the after-tax cost of their 2022 interest expense?

Note: Round your intermediate calculations and the final answer to the nearest whole dollar amount.