I wish to borrow $400,000 to buy a house. If the current interest rate on the loan is 4.8% per annum, then my monthly repayment at the end of every month for the next 30 years is: Select one: a. $2,908.66 b. $2,098.66 c. $2,090.30 d. $1,111.11

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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.