Question

Which statement about the annual percentage rate (APR) is true?

a.If you have good credit, you will get a higher APR.
b.If the APR is 5%, you will pay 5% of the balance per month.
c.The APR is not a good way to compare loans.
d.The APR helps compare loans with the same payback period, but with different monthly rates and different fees.

Answer 1

A- If you have good credit, you will get a higher APR

Explanation:

Answer 2

d. The APR helps compare loans with the same payback period, but with different monthly rates and different fees.

Explanation:

A loan can be defined as an amount of money that is being borrowed from a lender and it is expected to be paid back at an agreed date with interest.

Generally, the financial institution such as a bank lending out the sum of money usually requires that borrower provides a collateral which would be taken over in the event that the borrower defaults (fails) in the repayment of the loan.

An annual percentage rate (APR) is an amount of money paid as interest by borrowers or earned on loans by lenders such as banks, expressed as a percentage of the amount borrowed or invested over a 12-month period i.e on an annual basis.

Generally, the annual percentage rate (APR) helps compare loans with the same payback period, but with different monthly rates and different fees.