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

Equaliser

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Nov 21, 2021
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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

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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.
Please share your work - a picture of your will be great.

We will help you with the interpretation after we digest your answer. Please tell us the equations that you have used to arrive at the solution.

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

Equaliser

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Nov 21, 2021
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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

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Jun 18, 2007
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25,875
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.
 
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