A loan of $10,000 is amortized by equal annual payments for 30 years at an...
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Accounting
A loan of $10,000 is amortized by equal annual payments for 30 years at an effective annual interest rate of 5%. The income tax rate level is at 25%. Assume the tax on the interest earned is based on the amortization schedule.
a) Determine the income tax in the 10th year
b) Determine the total income taxes over the life of the loan
c) Calculate the present value of the after-tax payments using the before-tax yield rate. Answer to the nearest dollar.
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