A student has a savings account earning 9% simple interest. She must pay $1800 for first-semester tuition by September 1 and $1800 for second-semester tuition by January 1. How much must she earn in the summer (by September 1) to pay the first-semester bill on time and still have the remainder of her summer earnings grow to $1800 between September 1 and January 1

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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.