Fauzi bought a low-cost house at a price of RM90 000 with a 10% deposit.
The balance is paid in installments through a bank loan for 10 years. If Fauzi makes a total of RM837 in monthly installments, calculate the bank's interest rate on the housing loan.

A. 2.24%
B. 2.20%
C. 2.14
D. 2.12

To find the bank's interest rate on the housing loan, we need to use the formula for the monthly payment of a loan:

\[ M = \frac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n - 1} \]

where:
- \( M \) is the monthly payment,
- \( P \) is the loan principal,
- \( r \) is the monthly interest rate,
- \( n \) is the number of payments.

Given:
- The house price is RM90,000.
- A 10% deposit is paid, so the loan principal \( P \) is 90% of the house price.
- Monthly installment \( M \) is RM837.
- Loan duration \( n \) is 10 years (120 months).

First, calculate the loan principal \( P \):

\[ P = 90\% \text{ of RM90,000} = 0.90 \times 90,000 = RM81,000 \]

Now, substitute the known values into the formula:

\[ 837 = \frac{81,000 \cdot r \cdot (1 + r)

Learn how to calculate the bank's interest rate on a housing loan with monthly installments of RM837. Solve for the loan principal, interest rate, and loan duration using the loan payment formula. Suitable for advanced high school students and learners interested in finance calculations.

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