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b. What are the PVs of the streams at a 0% discount rate? Round your answers to the nearest
dollar. Stream A: $ Stream B: $ Jan sold her house on December 31 and took a $5 , 000
mortgage as part of the payment. The 10 -year mortgage has a 6% nominal interest rate, but it
calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B
of her IRS Form 1040 the amount of interest that was included in the two payments she received
during the year. a. What is the dollar amount of each payment Jan receives? Round your answer
to the nearest cent. 5 b. How much interest was included in the first payment? Round your
answer to the nearest cent. 5 How much repayment of principal was included? Do not round
intermediate calculations. Round your answer to the nearest cent. 5 How do these values change
for the second payment? 1. The portion of the payment that is applied to interest declines, while
the portion of the payment that is applied to principal increases. I1. The portion of the payment
that is applied to interest increases, while the portion of the payment that is applied to principal
decreases. III. The portion of the payment that is applied to interest and the portion of the
payment that is applied to principal remains the same throughout the life of the loan. IV. The
portion of the payment that is applied to interest decines, while the portion of the payment that is
applied to principal also declines. V. The portion of the payment that is applied to interest
increases, while the portion of the payment that is applied to principal also increases. interest
must Jan report on Schedule B for the first year? Do not round intermediate calculations. Round
your answer to the nearest cent, rest income be the same next year? c. How much interest must
Jan report on Schedule B for the first year? Do not round intermediate calculations. Round your
answer to the nearest cent $ Will her interest income be the same next year? #16.1 ime change
over time? le interest charge, increases and the repayment of principal increases. ie interest
charge, declines and the repayment of principal increases. le interest charge, declines and the
repayment of principal declines. V. As the loan is amortized (paid off), the beginning balance
declines, but the interest charge and the repayment of principal remain the same. d. If the
payments are constant, why does the amount of interest income change over time2/1 I. As the
loan is amortized (paid off), the beginning balance, hence the interest charge, increases and the
repayment of principal increases. II. As the loan is amortized (pald off), the beginning balance,
hence the interest charge, declines and the repayment of principal increases. III. As the loan is
amortized (paid off), the beginning balance, hence the interest charge, declines and the
repayment of principal declines. IV. As the loan is amortized (paid off), the beginning balance,
hence the interest charge, increases and the repayment of principal declines. V . As the loan is
amortized (paid off), the beginning balance declines, but the interest charge and the repayment of
principal remain the same.

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b- What are the PVs of the streams at a 0- discount rate- Round your a.docx

  • 1. b. What are the PVs of the streams at a 0% discount rate? Round your answers to the nearest dollar. Stream A: $ Stream B: $ Jan sold her house on December 31 and took a $5 , 000 mortgage as part of the payment. The 10 -year mortgage has a 6% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year. a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent. 5 b. How much interest was included in the first payment? Round your answer to the nearest cent. 5 How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent. 5 How do these values change for the second payment? 1. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal increases. I1. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal decreases. III. The portion of the payment that is applied to interest and the portion of the payment that is applied to principal remains the same throughout the life of the loan. IV. The portion of the payment that is applied to interest decines, while the portion of the payment that is applied to principal also declines. V. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal also increases. interest must Jan report on Schedule B for the first year? Do not round intermediate calculations. Round your answer to the nearest cent, rest income be the same next year? c. How much interest must Jan report on Schedule B for the first year? Do not round intermediate calculations. Round your answer to the nearest cent $ Will her interest income be the same next year? #16.1 ime change over time? le interest charge, increases and the repayment of principal increases. ie interest charge, declines and the repayment of principal increases. le interest charge, declines and the repayment of principal declines. V. As the loan is amortized (paid off), the beginning balance declines, but the interest charge and the repayment of principal remain the same. d. If the payments are constant, why does the amount of interest income change over time2/1 I. As the loan is amortized (paid off), the beginning balance, hence the interest charge, increases and the repayment of principal increases. II. As the loan is amortized (pald off), the beginning balance, hence the interest charge, declines and the repayment of principal increases. III. As the loan is amortized (paid off), the beginning balance, hence the interest charge, declines and the repayment of principal declines. IV. As the loan is amortized (paid off), the beginning balance, hence the interest charge, increases and the repayment of principal declines. V . As the loan is amortized (paid off), the beginning balance declines, but the interest charge and the repayment of principal remain the same.