Repayment of loan question (1 Viewer)

[VenomP]

"Ali takes out a loan of $10,000 dollars to buy a car. He will repay the loan in five years paying 60 equal monthly installments, beginning one month after he takes out the loan. Interest is charged at 6% p.a., compounded monthly.

Find how much the installment should be, correct to the nearest cent."

If I could get some help on this from you guys that'd be fantastic. I'm quite at a loss on how to do this one.

Just with the underlined part, what effect does this have in the working out?

The answer is $199.33.

 

[Forbidden.]

It's been a while since I did this, but you must adjust the principal and time rate so the interest applies at the beginning of the year, i.e. in the sum, the first term already has interest applied.
If the interest was applied at the end of the year then interest would be applied to the second term of the sum.
Play around with it.