Which One of the Following Statements Concerning the Annual Percentage

question 113

Multiple Choice

Which one of the following statements concerning the annual percentage rate is correct?

• A)The stated interest rate considers interest on interest.
• B)The rate of interest you actually pay on a loan is called the stated interest rate.
• C)The annual percentage rate is lower than the annual percentage rate when an interest rate is compounded quarterly.
• D)When firms advertise the stated interest rate they are violating European truth-in-lending laws.
• E)The stated interest rate equals the annual percentage rate when the rate on an account is designated as simple interest.

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