D. RM10 889.07

6. Mak Siti made a loan from Bank Masyarakat for a period of 5 years with an interest rate of 6.5% per annum. If he pays monthly installments of RM237.50, look for Mak Siti's loan money.

To determine how much money Mak Siti originally borrowed from Bank Masyarakat, we can use the formula for calculating the loan principal in a fixed installment loan. The loan payment formula for an amortizing loan (where the borrower makes fixed payments over time) is:

\[
P = \frac{A \times \left(1 - (1 + r)^{-n}\right)}{r}
\]

Where:
- \(P\) = Principal loan amount (which we need to find)
- \(A\) = Monthly payment (RM 237.50)
- \(r\) = Monthly interest rate (annual rate divided by 12)
- \(n\) = Total number of payments (5 years × 12 months = 60 months)

The interest rate is 6.5% per annum, so the monthly interest rate is:

\[
r = \frac{6.5\%}{12} = \frac{0.065}{12} \approx 0.005417
\]

Now, the total number of payments for 5 years is \(n = 5 \times 12 = 60\).

Substituting the values into the loan payment formula:

\[
237.50 = \frac{P \times \left(1 - (1 + 0.005417)^{-60}\right)}{0.005417}
\]

Now, let's solve for \(P\) (the loan amount).Mak Siti originally borrowed approximately **RM 12,138.31** from Bank Masyarakat.

Would you like any further details or explanations?

Here are 5 related questions to expand on this topic:
1. How do changes in the interest rate affect the monthly installment?
2. What would happen if Mak Siti decided to shorten the loan period to 3 years?
3. How much interest will Mak Siti pay over the entire loan period?
4. How would extra monthly payments affect the total interest paid?
5. What is the difference between simple interest and compound interest in loans?

**Tip**: Paying extra toward your loan principal each month can significantly reduce the total interest paid over the life of the loan.

Mak Siti made a loan from Bank Masyarakat for a period of 5 years with an interest rate of 6.5% per annum. If she pays monthly installments of RM237.50, how much loan money did Mak Siti borrow?

This page explains how to calculate the loan amount Mak Siti borrowed based on her monthly installments of RM237.50 for a 5-year loan with a 6.5% annual interest rate. Learn the amortizing loan formula and understand key concepts like monthly interest rates and payment schedules.

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