Mrs. Tina bought properties that will amount to P 223,200 in two years and P 450,000 in six years. She agrees to pay P 340,00 today and the balance in two and a half years. How much must she pay at the end of two and a half years if (a) money is worth 7% compounded continuously and (b) money is worth 8.5% compounded bimonthly. eng econ

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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.