Problem

An elderly lady owns a home for which "he has completely paid. She arranges a reverse...

An elderly lady owns a home for which "he has completely paid. She arranges a reverse mortgage for $100,000, whereby she will receive monthly paymcnts for the home from a bank. She will be allowed to live in the house until her death whereupon her estate will receive the estate will receive the equivalent of the remaining payments in lump sum. The bank then owns the home. One month after she turns 70, she begins receiving monthly paymentson a 30-year reverse mortagage at 7% interest compounded monthly.

(a) What monthly payment does she receive?

(h) At the time of her death at age 80, what lump sum payment is made to her estate?

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