You borrow a five-year $13,000 loan with monthly payments of $250. What is the annual percentage rate (APR) on the loan? Payments (PMT) = 1. We need number of periods (N) in months 2 Interest rate will be per month. PV Payment monthly N monthly months <-- We need this in months

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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.