Alex is selling his sailboat and has received an offer öf $5,000 HOw plus an auuitiu $9,000 in 6 months. Using a discount rate of 3% compounded monthly (j12), calculate the value of the offer in today's dollars. Round you answer to 2 decimal places. Your Answer:

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A:

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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.