Brandt receives a loan of S10000 from a bank at an annual interest rate of 6% compounded monthly to be repaid in monthly installments within a 10-year period. a Determine the monthly installments in order to repay the loan on time. b Find how much she still owes after the fifth year.

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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.