A young executive is going to purchase a vacation property for investment purposes. She needs to borrow $85,000.00 for 29 years at 6.5% compounded monthly, and will make monthly payments of $543.33. (Round all answers to 2 decimal places.) What is the unpaid balance after 15 months? $ During this time period, how much interest did she pay? $

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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.