rate. Four years ago, ZXY deposited $2,820 in an account that has earned and will earn 15.00 percent per year in compound interest. If CBA deposits $3,810 in an account today that earns simple interest, then how much simple interest per year must CBA earn to have the same amount of money in 8 years from today as ZXY will have in 8 years from today? Answer as an annual O 19.05% (plus or minus .05 percentage points) 15.80% (plus or minus .05 percentage points) 37.00% (plus or minus .05 percentage points) 40.25% (plus or minus .05 percentage points) None of the above is within .05 percentage points of the correct answer

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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.