Which one of the following statements is correct? Answer The APR is equal to the

Question

Which one of the following statements is correct? Answer            

                            
           The APR is equal to the EAR for a loan that charges interest monthly.                             
           The EAR is always greater than the APR.                             
           The APR on a monthly loan is equal to (1 + monthly interest rate)12 - 1.                             
           The APR is the best measure of the actual rate you are paying on a loan.                             
           The EAR, rather than the APR, should be used to compare both investment and loan options.

Explanation / Answer

The EAR, rather than the APR, should be used to compare both investment and loan options.

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