Steven Riley is borrowing $9,000 for 5 years at 8 percent. Payments are made on a monthly basis, which are determined using the add-on method.   How much total interest will Steven pay on the loan if it is held for the full 5-year term? $   What are Steven's monthly payments? Round the answer to the nearest cent. $   per month How much higher are the monthly payments under the add-on method than under the simple interest method (determined using a calculator or approximated using Exhibit 7.6)? Round the answer to the nearest cent. $   per month

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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.