The Best Measure of the True Cost of Credit Is

question 104

Multiple Choice

The best measure of the true cost of credit is the

• A)monthly payment.
• B)finance charge.
• C)annual percentage rate of interest.
• D)late fee.

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Definitions:

Annuity's Payments

Regular fixed payments from an annuity contract, typically made to the holder for life or a specified period.

Mortgage Loan

A loan secured by the collateral of specified real estate property, which the borrower is obliged to pay back with a predetermined set of payments.

Compounded Monthly

Interest calculation method where interests earned themselves earn interest, recalculated on a monthly basis.

Interest

The cost of borrowing money or the payment received for deposit funds, usually expressed as a percentage rate over a period of time.