To discharge a debt, with the interest of 7% compounded monthly, Mark agrees to pay P500 at the beginning of each month for 6 years. 1. Find the original size of the debt. 2. Find the remaining liability of Mark just after he makes his 5th payment 3. Find the remaining liability of mark just before he makes his 10th 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.