I need help with this reverse morgage problem so if someone could give me an detailed explanation it would be greatly appreciated <3

Subhotosh Khan

Super Moderator
Staff member
Do you know the Compound interest formula?

Please show us what you have tried and exactly where you are stuck.

Please follow the rules of posting in this forum, as enunciated at:

Equaliser

New member
I have managed to convert the APR into effective monthly rate and got 0,83%, using the compound interest formula I get result of t = 0,635 (approximately) I am unsure of how to interpret that result.

Subhotosh Khan

Super Moderator
Staff member
I have managed to convert the APR into effective monthly rate and got 0,83%, using the compound interest formula I get result of t = 0,635 (approximately) I am unsure of how to interpret that result.

What is the unit of 't'? months? weeks? days?

Equaliser

New member
I just used the compound interest formula you mentioned and because I am not that good with logarithms I used wolfram alpha to calculate the rest

Subhotosh Khan

Super Moderator
Staff member
I just used the compound interest formula you mentioned and because I am not that good with logarithms I used wolfram alpha to calculate the rest
your expression for compounded value is correct for 1 payment. However this is a problem with multiple payment - like annuity or mortgage. What formula have been taught regarding annuities or mortgage payment.

Those formulas are based on compound interest formula.

JeffM

Elite Member
Last edited:
• Subhotosh Khan