Individual Assignments: Problems selected from Chapter 14. (10 total points available)
Complete the following Problems in Chapter 14
Javier and Anita Sanchez purchased a home on January 1, year 1 for $500,000 by paying $200,000 down and borrowing the remaining $300,000 with a 7 percent loan secured by the home.
The loan requires interest-only payments for the first five years. The Sanchezes would itemize deductions even if they did not have any deductible interest.
On January 1, the Sanchezes also borrowed money on a second loan secured by the home for $75,000.
The interest rate on the loan is 8 percent and the Sanchezes make interest-only payments in year 1 on