What is the relationship between an annually compounded rate and the annual percentage rate (APR) which is calculated for truth-in-lending laws for a loan requiring monthly payments?
Multiple Choice
The APR is lower than the annually compounded rate.
The APR is higher than the annually compounded rate.
The APR equals the annually compounded rate.
The answer depends on the interest rate.
The APR is lower than the annually compounded rate. |
The APR also called nominal interest rate does not include compounding effect so it is lower than the annually compounded rate. |
Option A is correct |
What is the relationship between an annually compounded rate and the annual percentage rate (APR) which...
Which of the following statements about APR (Annual Percentage Rate) and EAR (Effective Annual Rate) is NOT true? EAR is usually higher than APR if the compounding frequency is more than annual. EAR is the real interest rate consumer pays. APR considers compounding. Truth-in-lending laws in the U.S. require that lenders disclose an APR on virtually all consumer loans.
If the APR for a car loan is 14%, what is the effective annual interest rate (in %) if interest on the loan is compounded monthly and you have biweekly payments?
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asap ) What annual percentage rate (APR) would Rayne need to earn if she deposits S1,000 per month into an account beginning one month from today in order to have a total of S1,000,000 in 30 years? A) 5.98% B) 6.55% C) 4.87% D) 6.14% 10) Jia borrows S50,000 at 10 percent annually compounded interest to be repaid in four equal annual installments. The actual end-of-year loan payment is A) $10,774 B) S12,500 C) $14.340 D) S15,773 11) How long...