You have some extra cash this month and you are considering putting it toward your car loan. Your interest rate is 6.6%​, your loan payments are $639 per​ month, and you have 36 months left on your loan. If you pay an additional $1,500 with your next regular $639 payment​ (due in one​ month), how much will it reduce the amount of time left to pay off your​ loan? ​(Note: Be careful not to round any intermediate steps less than 6 decimal​ places.) a) The new time left to pay off your loan will be ______months. b) Thus, you reduce the amount of time remaining in the loan by approximately _____ 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.