6. Julio borrows 500,000 to be repaid with quarterly payments for five years with the first payment one quarter from today. The loan interest rate is a nominal interest rate of 8% compounded quarterly. a. Determine the amount of the monthly payment. (5 points) quarterly 10th 04 77 1-1 b. Immediately after the 24th payment, Julio refinances the loan at a new rate. The new loan interest rate is a nominal interest rate of 4% compounded quarterly. Julio continues to make payments of Y for the remainder of the loan period. Determine Y.

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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.