Elana and Wiyot borrowed $41,000 at 8.54% compounded monthly as a second mortgage loan against their current home. Repayment amount is $4,800 at the end of every six months a. How many payments are required to repay the loan!

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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.