QUESTION 1 Which of the following statement related to interest rates is correct
ID: 2796864 • Letter: Q
Question
QUESTION 1
Which of the following statement related to interest rates is correct?
Annual interest rates consider the effect of interest earned on reinvested interest payments.
When comparing loans, you should compare the effective annual rates.
Lenders are required by law to disclose the annual interest rate of a loan to prospective borrowers.
Annual and effective interest rates are equal when interest is compounded monthly.
10 points
A.Annual interest rates consider the effect of interest earned on reinvested interest payments.
B.When comparing loans, you should compare the effective annual rates.
C.Lenders are required by law to disclose the annual interest rate of a loan to prospective borrowers.
D.Annual and effective interest rates are equal when interest is compounded monthly.
Explanation / Answer
QUESTION 1
Which of the following statement related to interest rates is correct?
the correct option is
When comparing loans, you should compare the effective annual rates.
When we compare the effective interest rate actual cost is compared.
other option are incorrect
B.When comparing loans, you should compare the effective annual rates.
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