You just graduated from the University of Arizona. Unfortunately, you have also accumulated a $30,000 student...

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You just graduated from the University of Arizona. Unfortunately, you have also accumulated a $30,000 student loan over four years. Now you need to start paying it off. Suppose the interest rate on the loan is 6% and you need to pay off the loan in 10 years with equal annual payment every year. a) Figure out what the equal payment amount should be every year. Also figure out a payment schedule of interest and principal payment every year for the 10 years. (2 points) b) As we know, the interest on student loan, up to $2,500 each year, is deducted from your gross income to figure out your adjusted gross income (AGI). Suppose your marginal tax rate for the next ten years after graduation is 20%. Please figure out how much this deduction can save you in federal personal income tax every year for the next 10 years. (1 point) c) Please say in a few sentences why federal government should allow you to deduct student loan interest payment from your income to calculate your tax liability. (1 point) You just graduated from the University of Arizona. Unfortunately, you have also accumulated a $30,000 student loan over four years. Now you need to start paying it off. Suppose the interest rate on the loan is 6% and you need to pay off the loan in 10 years with equal annual payment every year. a) Figure out what the equal payment amount should be every year. Also figure out a payment schedule of interest and principal payment every year for the 10 years. (2 points) b) As we know, the interest on student loan, up to $2,500 each year, is deducted from your gross income to figure out your adjusted gross income (AGI). Suppose your marginal tax rate for the next ten years after graduation is 20%. Please figure out how much this deduction can save you in federal personal income tax every year for the next 10 years. (1 point) c) Please say in a few sentences why federal government should allow you to deduct student loan interest payment from your income to calculate your tax liability. (1 point)

Answer rating: 100% (QA)

a To calculate the equal payment amount every year we can use the formula for the present value of an annuity PMT fracPV times r times 1 rn1 rn 1 Wher... View the full answer