Theo wants to take out a loan. He takes out a loan for 15000 dollars at 3,7% quarterly interest, compounded quarterly. The loan is for a period of 5 years with end of the quarter payments of 824,97 dollars a) How much does Theo still owe after 3 years. b) After 3 years, how much of Theo's next payment will actually go towards paying off the loan? How much is paid in interest for this 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.