QUESTION 11. Debbie wants to buy a new car. The bank is prepared to give her a loan on the basis that she pays a 30% deposit, a residual value of R 200 000.00 and finances the balance with a loan. The loan is for a period of five (5) years. The full purchase price of the car is R 300 000.00. The instalments on the loan are payable at the end of every month. The interest ate is 13.5% per annum. Calculate what the amount of Debbie's monthly instalments on the oan will be. R 12 742.16 R 10 416.36 R 10 533.55 R 12 885.51 None of the above

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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.