Problem 4-17

A reverse mortgage is made with a balance not to exceed $300,000 on a property now valued at $700,000. The loan calls for monthly payments to be made to the borrower for 120 months at an interest rate of 6 percent. Required:

a. What will the monthly payments be?

b. What will be the loan balance at the end of year 3?

c. Assume that the borrower must have monthly draws of $2,000 for the first 50 months of the loan. Remaining draws from months 51 to 120 must be determined so that the $300,000 maximum is not exceeded in month 120. What will draws by the borrower be during months 51 to 120?

Part B is my problem my answer is $72,009.27 all other parts are correct

A) $1,830.62 correct

C) $1,667.82 correct