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A borrower obtains a $150,000 reverse annuity mortgage with monthly payments over 10 years. If the interest rate of the mortgage loan is 8%, what
- A borrower obtains a $150,000 reverse annuity mortgage with monthly payments over 10 years. If the interest rate of the mortgage loan is 8%, what is the monthly payment received by the borrower?
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- $820
- $863
- $1,250
- $1,820
Correct answer is A
monthly rate: 8/12=.66667%
number of month = 10*12=120
monthly payment =future value/FVA .66667%,120
= 150000/182.95
= $ 819.90 Per month (approx 820)
**you can find future value annuity factor using financial calculator
This explanation is so confusing and im not sure what number to enter on the financial calculator. Please explain
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