Reverse Mortgage and Depreciation
1. Your parents or grandparents have asked for your advice on a reverse mortgage. Go to http://www.mlsreversemortgage.com/reverse-mortgage-calculator (Links to an external site.) and read about reverse mortgages. Now calculate how much of a payment your parents or grandparents would receive if they were born in 1924 and their home is worth $150,000. Use this forum to discuss the following: a. Based on your research, what would you advise your parents or grandparents to do? b. What are the pros and cons of reverse mortgages? 2. Comment on another classmate’s entry. ADD VALUE. Go to http://www.kbb.com (Links to an external site.). Find the price of a car you would like to buy. Assume you bought this car at that price for business use and it has a residual value of 20% of the purchase price. Compute the depreciation each year under a 5-year straight-line depreciation. Then, calculate the depreciation using MACRS (Table 17.5 in the text). How does this depreciation represent the value of the car as it ages? Would this depreciation impact the amount of money you would spend on a car? Why or why not? Comment on another classmate’s entry. ADD VALUE. Two posts required for credit.