this is a rather wide scope of a question. Usually there is an algorithm that is used to determine was the cost is going to be. It typically includes profit (ASR, ROI, IRR), overhead, risks (Multiple, default, reinvestment, interest rates, etc), and acquisition. There is a time element both for loans too long or too short. We don't have enough information to even begin to address this question.
Most banks hire actuaries to calculate these formulas.
http://www.soa.org/
This link will you give you an idea of the career path of an actuary. Good Luck!
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
