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  • Jan 1, 2013, 11:18 PM
    jrodkins
    Personal Finance Questions
    The example states:
    "What are the after tax mortgage payments on a $200,000, 30 year fixed rate mortgage that has an annual fixed interest rate of 5%? Payments are made monthly."

    The question is:
    There is a problem with this exam problem. What is it?

    Am I right in saying that in order to find the after-tax mortgage payments, we need the tax % or brackets - which this example does not provide?
  • Jan 2, 2013, 08:54 AM
    ArcSine
    That'd be my guess.

    While a simple amortization schedule could tell you the principle / interest composition of each payment, one would also need to know the payer's marginal tax rate in order to figure the after-tax net amount of each monthly payment, as this would vary from individual to individual.

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