Mason borrows $41,217.00 to buy a car. He will make monthly payments for 6 years. The car loan has an interest rate of 5.40% p.a. After 18 months Mason decides to pay off his car loan. How much does he owe on the loan?

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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.