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Debbie McAdams paid 7% interest on a $5,500 loan balance. Jan Burke paid $5,460 interest on a $52,500 loan. Based on 1 year:

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Answer:

the requirements are missing, so I looked for similar questions.

a) What is the amount of interest paid by Debbie?

$5,500 x 7% = $385

b) What was the interest rate paid by Jan?

$5,460 / $52,500 = 10.4%

c) Since both are in the 28% tax bracket, how much can they deduct for interest expense?

assuming that both Debbie and Jan itemize their deductions and were allowed to deduct this specific interest expense (individual taxpayers can deduct mortgage and business related interest expense only):

Debbie can deduct $385 x 28% = $107.80

Jan can deduct $5,460 x 28% = $1,528.80

User Gerald Hansen
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