Rich is attending a 4year college as a freshman he was approved for a 10 year federal unsubsized student loan in the amount of 7,900 at 4 29 he knows he has the option of beginning repayment of the loan in 4.5 year he also knows that during this non payment time interest will accure at 4.29 rich made his last monthly payment interest only payment on November 1st his next payment is due on December 1st whatvwill be the amount of that interest only payment

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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.