Which One of the Following Statements Related to Loan Interest

question 54

Multiple Choice

Which one of the following statements related to loan interest rates is correct? 

• A) The annual percentage rate considers the compounding of interest. 
• B) When comparing loans you should compare the effective annual rates. 
• C) Lenders are most apt to quote the effective annual rate. 
• D) Regardless of the compounding period, the effective annual rate will always be higher than the annual percentage rate. 
• E) The more frequent the compounding period, the lower the effective annual rate given a fixed annual percentage rate. 

---

Definitions:

Carol Gilligan

An American feminist, ethicist, and psychologist best known for her work on ethical community and ethical relationships, and certain subject-object problems in ethics.

Kohlberg's Theory

A theory of moral development proposed by Lawrence Kohlberg, suggesting that people progress through a series of stages of moral reasoning.

Flawed

Having imperfections, defects, or shortcomings.

Piaget's Theory

A framework for understanding child development that focuses on how children acquire knowledge and how their ability to think and reason evolves over time.