Rajiv and Laurie Amin are recent college graduates looking to purchase a new home. they are purchasing a 200,000 home by paying 20,000 down and borrowing the other 180,000 with a 30 year loan secured by the home. The Amins have the option of

1. paying no discount points on the loan and paying interest at 3% or

2. paying 1% discount point on the loan and paying interest on 2.5%

both loans require the Amins to make interest only payments for the first 5 years. unless otherwise stated the Amins itemize deductions irrespective of the amount of interest expense. The Amins are in the 24% marginal ordinary income tax bracket.

A. Assuming the Amins DO NOT itemize deductions, what is the break even point for paying the point to get a lower interest rate?

informotion Problem 14.51 (LO 14.3) (Stotic) [The followng information apples to the questions displayed below] Rajiv and Laurie Amin are recent college graduates looking to parchase a new home. They are purchasing a $200,000 home by paying $20,000 down and borrowing the other $180,000 with a 30 -year loan secured by the home. The Amins have the option of (1) paying no discount points on the loan and paying interest at 3 percent or (2) paying 1 discount point on the loan and paying interest of 25 percent. Both loans require the Anins to make interest-only payments for the first five years. Unless otherwise stated, the Amins itemize deductions irrespective of the amount of interest expense. The Amins are in the 24 percent marginat ordinary income tax bracket. Problem 14.51 Part a (Static) a. Assuming the Amins do not itemide deductions, What is the break even point for payng the point to get a lower interest rate