In order to start a small​ business, a student takes out a simple interest loan for ​$3000 for 9 months at a rate of 11.25​%.   a. How much interest must the student​ pay? b. Find the future value of the loan.

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Q: How much will you have saved at the end of 6 years? Find the interest.

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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.