A mother wishes to set up a savings account for her son's education. She plans on investing $750 when her son is 6 months old and every 6 months thereafter. The account earns interest of 8 percent per year, compounded semiannually. (a) To what amount will the account grow by the time of her son's 18th birthday? (b) How much interest will be earned during this period?

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Q: d. Ja d. 1

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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.