You secured a RM50,000 loan from Bank Rimau at an interest rate of 12% per year compounded monthly to purchase some machinery for your farm. The loan is to be paid back in 9 years.

a) Calculate the amount of the monthly installment.

b) Assume that after two years, you pay double the original monthly installment for 1 12

years. Immediately after that, you ask the bank your outstanding balance. How much

is the balance to pay to fully settle the loan?

c) How much of the interest is saved by paying the loan early?