kyle has a $15,000 in college debt when he graduates. he will pay it back with regular monthly payments $283.07 for the next 5 years. his loan is charging 5% interest per year compounded monthly. at the end of the 5 years how much total interest will kyle have paid.

kyle has a $15,000 in college debt when he graduates. he will pay it back with regular monthly payments $283.07 for the next 5 years. his loan is charging 5% interest per year compounded monthly. at the end of the 5 years how much total interest will kyle have paid.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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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.

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