ou just borrowed $490,000 for a mortgage on your new home. The mortgage has a 30​-year term with monthly payments and an APR of 6.96%. a. How much will you pay in​ interest, and how much will you pay in​ principal, during the first​ year? Question content area bottom Part 1 a. How much will you pay in

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A:

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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.