LaMar and Louise Hubbs moved from Alabama to the heart of Texas. They were delighted to find a Southern-style needed to borrow $150,000 and decided to obtain a 20-year loan at a 9.5% interest rate. However, the monthly payments were higher than they could afford, so they decided on a 30-year loan to obtain lower monthly payments. (Round your final answers to two decimal places.) (a) Find the monthly payments for the 20-year and the 30-year loans. 20-year loan $ 30-year loan $ (b) Find the total amount paid over the life of each loan. 20-year loan $ 30-year loan $ (c) Find the savings per month by going to the 30-year loan. $ (d) Find the increased total cost by going to the 30-year loan. $

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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.