For the fixed-rate mortgage below, determine the portion of the total monthly payment which is income-tax deductible. Round your answer to the nearest dollar. $$\begin{array} { l l }
\text { Amount of mortgage: } & \$ 142,000 \
\text { Term of mortgage: } & 25 \text { years } \
\text { Interest rate: } & 7.0 \% \
\text { Annual property tax: } & \$ 1025 \
\text { Annual insurance: } & \$ 620 \
\text { Owner's income tax bracket: } & 30 \%
\end{array}$$
A)$914
B)$965
C)$1079
D)$880

Question

For the fixed-rate mortgage below, determine the portion of the total monthly payment which is income-tax deductible. Round your answer to the nearest dollar. $$\begin{array} { l l } 
\text { Amount of mortgage: } & \$ 142,000 \
\text { Term of mortgage: } & 25 \text { years } \
\text { Interest rate: } & 7.0 \% \
\text { Annual property tax: } & \$ 1025 \
\text { Annual insurance: } & \$ 620 \
\text { Owner's income tax bracket: } & 30 \%
\end{array}$$
A)$914
B)$965
C)$1079
D)$880

Quizplus · Accepted Answer

The income-tax deductible portion of the monthly payment is the interest paid. First, calculate the monthly mortgage payment using the loan amount, term, and interest rate. Then, determine the interest portion of the first month's payment. The interest is deductible, not the principal, property tax, or insurance.

For the Fixed-Rate Mortgage Below, Determine the Portion of the Total