Deb and Rusty know that buying a house will save them money on taxes because they get to deduct the interest they pay to the bank each year and the property taxes they pay each year. First create a separate worksheet from the amortization schedule. Title this worksheet Analysis. In this worksheet, create a column titled Income starting at $90,000 and increasing at 3% for 20 years. What is their income after 20 years

Question

Business

Rishi

12 December, 13:12

Deb and Rusty know that buying a house will save them money on taxes because they get to deduct the interest they pay to the bank each year and the property taxes they pay each year. First create a separate worksheet from the amortization schedule. Title this worksheet Analysis. In this worksheet, create a column titled Income starting at $90,000 and increasing at 3% for 20 years. What is their income after 20 years

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Answers (1)

Know the Answer?

Micah Hanna · Answer 1

Their income after 20 years would be 72,550 dollars.

Explanation:

The income after 20 years can easily de determin by using compounding

formula

Future Value = Present Value (1 + I) ^ 20

= 90,000 (1 + 0.03) ^ 20

= 162,550 dollars

Income can be determing by subtracting Pv from Fv i. e

Income = 162,550 - 90,000 = 72,550

Calculation on excel sheet

A B C D

1 90,000 1.03 = A1 * 1.03 = C1-A1

2 = D1 1.03 = A2 * 1.03 = C2-A2

20 = D19 1.03 = A20 * 1.03 = A20 - C20

* In work sheet colunm D will show income on investment.