When you walk into a bank to get a mortgage loan, the interest rate the bank...
When you walk into a bank to get a mortgage loan, the interest rate the bank quotes you is called the ______________?
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APR |
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EAR |
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Yield |
Homework Answers
Ans APR
When you walk into a bank to get a mortgage loan, the interest rate the bank quotes you is called the APR.
APR refers to Annual Percentage Rate that is the interest charged by the bank anually on the loan.
EAR refers to Effective Interest Rate. It is taken after taking into effect the compounding of interest whether it be daily/monthly/quarterly/semi-anually/ annually or continuously.
EAR is generally more than APR due to the compounding effect.
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