A lovely couple in their 70s are thinking of taking out a reverse mortgage loan against their house. The kids are already out and each and every one of them has a successful career. So, there is no reason to bequeath the house to them. They want to borrow money partly to pay some medical bills and partly to have fun under the sun in Hawaii. Here is how it works. A bank would estimate the couple's "life expectancy" and predict the future price of the house. It will then lend money to the couple. After the couple's passing, the bank will take possession of the house and sell it to get the money. The couple will not pay any a penny to the bank in the future out of their pockets. You see that the story is similar to a discount bond. So our lovely couple contact the Delightful Demise Debt (DDD) company and ask for a loan. DDD appraises the current value of the house at half million dollars ($500,000). DDD estimates that the couple will depart in 15 years. It also predicts that the annual inflation rate during those 15 years will be 2 percent per year. So the house price will appreciate at that rate. Assume that selling the house at that time will not involve any costs, such as closing or repair costs. So, the sale price at that time will be a pure cash flow. This investment by DDD is quite risky. What if the inflation turned out to be much less than 2 percent? What if the couple "stick around" longer? What if the couple stop maintaining the house after they take out the loan (moral hazard)? Because of all these risks, DDD decides on a discount rate of 20 percent for the loan. Discount rate is another name for interest rate or the yield to maturity. It discounts future values to present. Based on all these assumptions, how many dollars would DDD decide to lend to the couple