An Annual Percentage Rate (APR)

question 18

Multiple Choice

An annual percentage rate (APR) :

• A) is not an interest rate but rather a percentage rate that reflects the effective interest rate on the loan.
• B) is an interest rate that includes tax service fees.
• C) is not an interest rate; it is a fee for lending.
• D) is an interest rate that only applies to refinancing.

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Definitions:

Prior Service Cost

The cost associated with the increase in pension benefits related to years of service credited in a pension plan amendment.

Straight-Line Basis

A method of calculating depreciation and amortization by evenly spreading the cost of an asset over its useful life.

Pension Retirement Benefits

Long-term benefits or compensations provided to employees upon retirement, which may include contributions made by the employer to a pension plan.

U.S. Tax Laws

The body of laws governing federal, state, and local taxation in the United States, affecting individuals, businesses, corporations, and other entities.