Assuming All APRs Equal, the Effective Interest Rate on a Loan

question 14

Multiple Choice

Assuming all APRs equal, the effective interest rate on a loan is highest when:

• A) The loan has no points and a 30 year maturity and is prepaid in five years
• B) The loan has no points and is prepaid at maturity
• C) Points are charged and the loan is paid off at maturity in 30 years
• D) Points are charged and the loan has a 30 year maturity but prepaid in five years

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Definitions:

Psychoactive Drugs

Substances that affect the mind, altering mood, perception, or consciousness when ingested or otherwise introduced into the body.

Hallucinogens

Substances that cause profound changes in perception, thought, and mood, often leading to visual or auditory hallucinations.

Depressants

Substances that reduce the activity of the central nervous system, leading to relaxation, reduced anxiety, and sleepiness.

Stimulants

Substances that increase arousal, attention, and energy by enhancing the activity of certain neurotransmitters in the brain.