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What is the interest charged in the first month

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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%.

Problem 1: What is the interest charged in the 1st month?

Option 1: $1,750
Option 2: $1,550
Option 3: $12.07
Option 4: None of the above

Problem 2: What is the monthly payment to the elderly?

Option 1: $1,750
Option 2: $1,550
Option 3: $1,203.50
Option 4: $2,953.50

Reference no: EM133004386

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