The following exercise is designed to be solved using technologysuch as calculators or computer spreadsheets.

Interest paid on a home mortgage is normally tax deductible. Thatis, you can subtract the total mortgage interest paid over the yearin determining your taxable income. This is one advantage of buyinga home. Suppose you take out a 30-year home mortgage for $250,000at an APR of 8% compounded monthly. The mortgage payments detailsfor the first year are given below.

Month	Initial balance	+Interest	?Payment	Final balance	Equity
1	$250,000.00	1,666.67	$1,834.41	$249,832.26	$167.74
2	$249,832.26	1,665.55	$1,834.41	$249,663.40	$336.60
3	$249,663.40	1,664.42	$1,834.41	$249,493.41	$506.59
4	$249,493.41	1,663.29	$1,834.41	$249,322.28	$677.72
5	$249,322.28	1,662.15	$1,834.41	$249,150.02	$849.98
6	$249,150.02	1,661.00	$1,834.41	$248,976.61	$1,023.39
7	$248,976.61	1,659.84	$1,834.41	$248,802.04	$1,197.96
8	$248,802.04	1,658.68	$1,834.41	$248,626.31	$1,373.69
9	$248,626.31	1,657.51	$1,834.41	$248,449.41	$1,550.59
10	$248,449.41	1,656.33	$1,834.41	$248,271.33	$1,728.67
11	$248,271.33	1,655.14	$1,834.41	$248,092.05	$1,907.95
12	$248,092.05	1,653.95	$1,834.41	$247,911.59	$2,088.41

Suppose that your marginal tax rate is 30%. What is your actualtax savings due to mortgage payments? (Round your answer to thenearest cent.)