The question reads:
A savings plan requires you to make payments of £250 each at the end of every month for a year. The bank will then make six equal monthly payments to you, with its first payment due one month after the last payment you make to the bank. Compute the size of each monthly payment made by the bank, assuming a nominal interest rate of 4% p.a. payable monthly.
Answer: £515.23 (=£3055.62/5.930618).
So I've been pondering on this question for a while now, and I'm not making any progress. I've tried various methods without any confidence in what I'm doing. Every method I try brings me a figure not mentioned in the answer. The only parts I'm confident in is the AER = 4.074%. What is the line of logic I should take with this question? Help is much appreciated as always.