A borrower obtains a partially amortizing constant payment mortgage loan for $75,000 at 24 percent for 2 years. Payments are monthly. After the last constant payment, he has to pay $12,000 to payback the remaining loan on maturity date. What will be the amount of remaining balance at the end of the second month? (Answer is rounded)

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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.