Which One of the Following Is Correct Concerning the Annual

question 178

Multiple Choice

Which one of the following is correct concerning the annual percentage rate (APR) ?

• A) The APR is greater than the effective annual rate.
• B) The APR formula for rate disclosure is [1 + (r/m)]m-1.
• C) The APR is the rate which lenders are required to disclose.
• D) The APR is best used to compare offers from various lenders.
• E) The APR considers all the effects of compounding.

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