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On June 1st 2016, Professor Cole bought an investment property for $400,000. He took out a...

On June 1st 2016, Professor Cole bought an investment property for $400,000. He took out a standard 30 year fixed mortgage for $238000 at a nominal rate of 5.500% per year, with uniform monthly payments starting one month from the date of closing. He closed on June 1st, and paid on the first of each month after that. He paid all of the loans closing costs.

a.) When he filed his taxes for 2016, he needed to calculate the interest paid on the mortgage. He had made 6 payments, because the January 1st 2017 payment covered the interest charged in December 2016. How much interest did he pay in 2016?

b.) Next year Professor Cole had to calculate his interest paid on the mortgage in 2017. How much interest was paid in 2017?

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ekkarill92 answered 1 year ago
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