Question

Janica's monthly mortgage payment was $900 last year, and on average, 13% of each payment was interest. if janica itemizes deductions on her federal income tax return, how much can she deduct for mortgage interest?

A)$1404
B)$1017
C)$75
D)$117

Answer 1

$1404

Explanation:

Answer 2

The amount deduct for mortgage interest was $1,404

A is correct.

Explanation:

Janica's monthly mortgage payment was $900 last year.

Average interest of each payment was 13%

We need to find deduction for income tax on interest for mortgage.

As we know deduction calculate on year.

Monthly Payment = $900

Yearly Payment = 900 x 12 = $10,800

Average interest = 13%

Interest on payment = 13% of 10800

`\Rightarrow 0.13* 10800`

`\Rightarrow 1404`

Hence, The amount deduct for mortgage interest was $1,404