Sinclair Wishes to Supplement His Retirement Income by $250 Per

question 30

Multiple Choice

Sinclair wishes to supplement his retirement income by $250 per month for the next 12 years. He plans to obtain a reverse annuity mortgage (RAM) on his home to meet this need. Estimate the amount of the mortgage he will require if the prevailing interest rate is 11% per year compounded continuously. ​

• A) $34,403
• B) $19,987
• C) $29,713
• D) $34,790
• E) $15,104

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Definitions:

Elevation

The height of a point or object measured from a specific level, typically sea level.

Tarn

A small lake, especially one within a cirque, a glacially scoured depression.

Depression

A low point or area in the Earth's surface, which can be caused by various geological processes such as erosion or tectonic movements.

Valley

A low area between hills or mountains, typically with a river or stream flowing through it.