Beginning three months from now, you want to be able to withdraw $2,200 each quarter from your bank account to cover college expenses over the next four years. the account pays .43 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years? Quarterly withdrawal Quarters per year Number of years Interest rate per quarter EA 2,200 4 0.43%

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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.