Question
Assume an elderly person owns a $350,000 home that is free and clear of mortgage debt. A lender has agreed to a $350,000 reverse mortgage
Assume an elderly person owns a $350,000 home that is free and clear of mortgage debt. A lender has agreed to a $350,000 reverse mortgage with monthly payments. The loan term is 15 years. The annual interest rate is 6%.
If the elderly passes away in 5 years (60 months), what will be the loan balance?
$266,031.85
$83,968.15
$26,603.19
None of the above
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Derivatives Markets
Authors: Robert L. McDonald
2nd Edition
032128030X, 978-0321280305
