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Reverse Mortgage (RML) Numerical Questions to Calculate Annual Installment:

Value of the property - Rs. 50,00,000

Loan Amount - 80%

Loan Tenor - 15 yea rs

Rate of interest - 10%

Calculate Annual Installment

a. 125895

b. 125985

c. 128595

d. 129585

Ans - a

Here,

PV = 5000000

LTVR = 80/100 = 0.8

n = 15 = 180

I = 10/100) = 0.1

= (5000000*0.8*0.1)/((1+0.1)^15-1)

= Rs. 125895

So, the Annual installment = Rs. 1,25,895