Question: Need detailed answer with steps 37. In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM, a lender agrees to pay

Need detailed answer with steps

37. In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM, a lender agrees to pay the homeowner a monthly payment, or annuity, and expects to be repaid from the homeowners equity when he or she sells the home or obtains other financing to pay off the RAM. Consider a household that owns a $150,000 home free

and clear of mortgage debt. The RAM lender agrees to a $100,000 RAM for 10 years at 6 percent. Assume payments are made annually, at the beginning of each year to the homeowner. Calculate the annual payment on the RAM.

A. $7,157.35

B. $7,586.80

C. $12,817.73

D. $13,586.80

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

1. Suppose you have obtained a 6%, 30 year fully-amortizing FHA mortgage loan of $152,625 to finance the purchase of your primary residence. In so doing, you must pay an additional mortgage insurance...

In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM, a lender agrees to pay the homeowner a monthly payment, or annuity, and expects to be repaid from...

Be sure to show step by step explanation by using inputs ( NV, I,pmt,Fv,I/y) financial calculator In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM,...

Reverse Mortgage (RAM) In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM, a lender agrees to pay the homeowner a monthly payment, or annuity, and...

Question 1 1 pts A biweekly mortgage: Group of answer choices has one rate adjustment after a set period, such as five years increases at regular intervals, with the increased payments used to pay...

Chapter 18 Take Home Packet 1) Solve ALL problems with a financial calculator (NO annuity formulas) - SHOW ALL WORK!! Chapter 18 - Packet a Chapter 18 Take Home Packet 1) Solve ALL. problems with a...

Based on the given tables, write the business rules that govern the relationship between Director and Play; create the basic Crow's Foot ERD; draw the equivalent object representation and UML class...

(30 pts.) The Nobel Dynamite Company is considering a new packing machine. The existing packing machine cost $500,000 five years ago and is being depreciated using straight-line over a 10-year life....

The foreign tax credit applies to expats. Group of answer choices True False

How do you create a unit test for a method that takes no parameters, but returns an integer with unknown user input: Scaner scanner = new Scanner(System.in); public int sumNumbers(){...