A couple borrows $180,000 at 5.4%, compounded monthly, ofr 30 years. After making 80 payments of $1011, they refinance at 4.8% compounded monthly for 25 years. with refinancing costs of %550 added to the new loan. A. find the amount refinanced  B. find the new monthly payment C. how much is saved by refinancing

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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.