Determine the cost of credit for a $3,300 loan with a simple interest rate of 8% and a one-time payment to pay the amount in full at the end of a 4-year term. Round the answer to two decimal places as needed.(1 point)
To find the cost of credit for a simple interest loan, we can use the formula:
Cost of Credit = Principal × Interest Rate × Time
Plugging in the given values:
Principal = $3,300
Interest Rate = 8% = 0.08
Time = 4 years
Cost of Credit = $3,300 × 0.08 × 4
Calculating the cost of credit:
Cost of Credit = $3,300 × 0.32
Cost of Credit = $1,056
Therefore, the cost of credit for a $3,300 loan with a simple interest rate of 8% over a 4-year term is $1,056.