A family has $16,000 saved for college tuition. They will need $64,000 for college expenses five years from now. If they place their money in an account with continuous compounding, what annual rate must they find to assure them of the needed $64,000?

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.