finish your engineering degree with $17,350 in student loans.  The interest rate on your loans is 0.6% per month.  The loan repayment period is 10 years and your monthly payment is set to be $203.24 [= $17,350(A/P, 0.6%, 120)]. Question 2: The total interest dollars repaid using the shorter is $2,750.  How total interest would be repaid using the 10-year repayment plan?

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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.