Suppose you invest $1,200 in an account paying 5% interest per year. a. What is the balance in the account after 4 years? How much of this balance corresponds to "interest on interest"? b. What is the balance in the account after 29 years? How much of this balance corresponds to "interest on interest"?

Q: 0. 00000

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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.