A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The loan will be $200,000 at 6 percent interest for 20 years.a. How would you analyze these alternatives?b. What if the biweekly loan was available for 5.75 percent? How would your answer change?

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Q: please step by step solution.

A: PART A: PART B: PART C:  PART D:

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A: Given,

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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.