Determine the cost of credit for a 2-year, $5,000 credit card loan with a monthly payment of $257.67, which corresponds to a fixed compound interest rate of 21.3% compounded monthly. Round the answer to two decimal places as needed.(1 point)
The cost of credit is $
.
The cost of credit can be calculated by subtracting the amount borrowed from the total amount paid over the 2-year period.
Total amount paid = Monthly payment x number of months
= $257.67 x 24
= $6,184.08
Cost of credit = Total amount paid - Amount borrowed
= $6,184.08 - $5,000
= $1,184.08
So, the cost of credit is $1,184.08.