Which of the Following Statements Is True of Annual Percentage

question 15

Multiple Choice

Which of the following statements is true of annual percentage rate (APR) ?

• A) The APR is similar to quoted interest rate which is a simple annual rate.
• B) The APR calculation adjusts for the effects of compounding and, hence, the time value of money.
• C) The APR is the true cost of borrowing and lending.
• D) The APR takes compounding into account.

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Definitions:

Security Interest

A lien or legal claim on assets that have been offered as security to ensure the repayment of borrowed money.

Real Property

Land and anything permanently affixed to it, such as buildings and improvements; distinguished from personal property.

Fair Housing Act

The Fair Housing Act is a federal law that prohibits discrimination in the buying, selling, renting, or financing of housing based on race, religion, national origin, sex, disability, or familial status.

Civil Rights Act

The Civil Rights Act is landmark legislation in the United States that outlaws discrimination based on race, color, religion, sex, or national origin.