Home equity line of credit-tax-deductible meaning

Assignment Help Financial Management

Reference no: EM131043461

A home equity line of credit (HELOC) is, loosely speaking, like a credit card for your home. You can borrow money by drawing down on the line of credit. But, because the borrowed money is for the purpose of your home, the interest is tax-deductible meaning that you can deduct the interest paid on this money from your income to reduce your taxes. If the current annual interest rate on a HELOC is 3.85% and your tax rate is 32%, what is the after-tax interest rate you will pay on any borrowings under the HELOC? *Make sure to input all percentage answers as numeric values without symbols, and use four decimal places of precision. For example, if the answer is 6%, then enter 0.0600.

Reference no: EM131043461

Questions Cloud

What is the total annual return for this bond : Suppose that an investor is planning to purchase a 9% semi-annual coupon bond selling at par with 10 years to maturity and plans to hold it for 4 years and sell it at an expected yield to maturity of 8.5%. The investor expects that he can reinvest th..

what happens to the NAV of growth mutual fund : Explain what happens to the NAV of a growth mutual fund (with 1 million share: outstanding) in the future if it now buys 100,000 Google July 720 calls for a premium of 18 if Google's stock price rises in the future to $755 by July 2016

What is the return shareholders are expecting : Ecolap Inc. (ECL) recently paid a $0.42 dividend. The dividend is expected to grow at a 10.50 percent rate. The current stock price is $47.32. What is the return shareholders are expecting?

Difference between risk-free interest rate-dividend yield : Suppose the 180-day S&P 500 futures price is 1,537.77, while the cash price is 1,525.14. What is the implied difference between the risk-free interest rate and the dividend yield on the S&P 500?

Home equity line of credit-tax-deductible meaning : A home equity line of credit (HELOC) is, loosely speaking, like a credit card for your home. You can borrow money by drawing down on the line of credit. But, because the borrowed money is for the purpose of your home, the interest is tax-deductible m..

Prove the given exponential identity : Prove the following exponential identity. Prove the following logarithmic identity. Solve the exponential equation for x and for y.

Describe the components of an ehr : What are your experiences with using an electronic information system (EHR)? Describe the components of an EHR, and using the assigned readings, any past experiences or observations, and your imagination

Global security policy-assignment preparation : Assignment: Write a 3-to 4-page paper describing the some of the issues you might face when maintaining security in a company that has offices in multiple countries.

What are the main weaknesses associated with ratio analysis : What are the main weaknesses associated with ratio analysis - Critically examine the performance of the company using the ratios extracted over the period under consideration

User Account

All Pages