Todd can afford to pay $335 per month for the next 5 years in order to purchase a new car. The interest rate is 5.7 percent compounded monthly. What is the most he can afford to pay for a new car today? Multiple Choice $17,453.72 $17,201.63 $18,035.51 $16,581.04 $23,193.64

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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.