uires R100 000 in finance to start her business. Mr Khumalo, her father, has agreed to provide her with R50 000 as capital and in return, she will pay him 2% of the profits she makes each year. SABSA Bank agreed to provide her with a loan of R50 000 which she will pay off in 5 equal instalments. Interest on this loan is 10% per annum. Mulalo has already secured an order for 12 evening dresses for the 12 Miss South Africa contestants. Required: From the scenario above, identify three users of financial information and explain how they benefit from accounting information supplie

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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.