Question

The executor of a will has to distribute an inheritance of P28 000 to a sole beneficiary in equal monthly payments over 4 years. If effective interest rates are 7.5% per annum, compounded monthly, how much will each monthly payment be?

Answer 1

$$28000\times(\frac{0.075}{12}+\frac{\frac{0.075}{12}}{(1+\frac{0.075}{12})^{48}-1})=677$$