Sam took a $5000 loan to build a deck in the backyard. The loan requires payments at the end of each quarter or 4 years. If the interest on the loan is 9% compounded monthly, what is the size of each payment, Sam requires to make

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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.