Bella opened a savings account this morning. Her money will earn 3.5 percent interest, compounded annually. After five years, her savings account will be worth $8,000. Assume she will not make any withdrawals. Given this, which one of the following statements is true? If Anna could have earned 2.5 percent interest, she could have more than $8,000 in her account after 5 years. Anna would have had to deposit more money to have $8,000 in five years if she could have earned 8 percent interest Anne will have less than $8,000 in her account at the end of the 3rd year. Stry Anna deposited more than $8,000 this morning Anna could have deposited less money and still had $8,000 in five years if she could have earned 2.5 percent interest The present value of Anna's account is $8,000

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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.