If you are planning to apply for a personal loan and borrow PhP 30,000 and repay the principal and interest for an agreed length of time of 3 years, a. How much monthly payment is needed for each bank offer? b. How much interest would you pay for 3 years for each bank offer? c. Which is the best option for you among the given choices below if you are to pay monthly for 3 years? Justify your answer and apply what you have learned on simple and compound interest. Bank (Personal Loan) Monthly Interest Rate A 1.3% В 1.89% C 1.22% D 1.5% E 1.25%

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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.