Question 5

Loans

A loan of R80 000 is repayable over 10 years by monthly instalments in arrears . The repayments are calculated using an effective rate of interest of 8% per annum. Calculate the size of the first and last monthly instalments given that each payment after the first increases by 5% from its predecessor.

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I have tried deducting the loan repayment amount(excluding interest) from the repayment amount i got of 958,...., which then gave me an answer of around 290, which i divided by 12, to get near to the answer. But this is incorrect, I would appreciate if someone were to help with the above question.

Thanks

Regards.