Formula in After tax

  • 12 years ago

    Guys, I'm writing  a program that computes the annual after-tax cost of a new house for the first year of ownership. The cost is computed as the annual mortgage cost minus the tax savings. The input should be the price of the house and the down payment. The annual mortgage cost can be estimated as 3% of the initial loan balance credited toward paying off the loan principal plus 8% of the initial loan balance in interest. The initial loan balance is the price minus the down payment. Assume a 35% marginal tax rate and assume that interest payments are tax deductible. So, the tax savings is 35% of the interest payment.

    The sample output should be:

    House price: 220000

    Down payment: 10000

    Annual after-tax cost: 17220.00

     The problem is that my sample output is not equal to my program, hope you could help me out, thanks

    formula for the following:   initialloan = houseprice - dwpayment;

                                         taxsave = annualmortagage*.35;

                                         annualtax  = annualmortage - taxsave;

                                         mortgage..... (having problems with analyzing 3 and 8 percent, im kinda confused) 

      Hope you guys could lend me a hand... thanks                          

  • 12 years ago

    Thanks a lot! Now all i have to do is translate all those formula into C++ program.

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