Real Estate Math

An Oklahoma buyer is in the 22% federal income tax bracket and 5% Oklahoma income tax bracket. They pay $14,400 in mortgage interest annually. What is their total annual tax savings from the mortgage interest deduction (assuming they itemize)?

A$3,168
B$4,032✓ Correct
C$720
D$2,160

Explanation

Total tax savings = Interest × (Federal Rate + State Rate). $14,400 × (22% + 5%) = $14,400 × 27% = $3,888.

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