Suppose you take out a 30 year mortgage for $ 150000 at 6.75% interest. The monthly payments on this loan are $ 972.90. If you pay an extra 10% per month on your mortgage, how soon will you pay off the loan? New length in years = How much will you save in interest by making the extra payments? Saving = If you put $ 972.90 per month into an annuity earning 8.75% interest compounded monthly for the remaining time on your original loan, how much money will you have at the end of the original 30 years? Extra savings =

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A: Here,

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A: Here,

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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.