Corey buys 10 Tufflift 4-post, 4.5-ton car hoists for his parking garage at a total cost of $493,000. He finances this with a five-year loan at 6.5% APR with monthly payments. After he has made the first 20 payments, how much is the outstanding principal balance on his loan? OA. $276,855 B. $346,068 C. $692,136 D. $484,495

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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.