Determine the cost of credit for a $3,300 loan with a simple interest rate of 8% and a one-time payment the amount in full at the end of a 4-year term. Round the answer to two decimal places as needed.
The cost of credit is $_____.
The formula for calculating the cost of credit for a simple interest loan is:
Cost of credit = Principal x Interest rate x Time
In this case, the principal is $3,300, the interest rate is 8%, and the time is 4 years. Plugging these values into the formula:
Cost of credit = $3,300 x 0.08 x 4
Cost of credit = $1,056
Therefore, the cost of credit for the loan is $1,056.