Finance
The Truth in Lending Act (TILA) requires lenders to disclose the Annual Percentage Rate (APR) because:
AIt shows the lender's profit margin on the loan
BIt provides a standardized cost of credit that allows borrowers to compare loans by reflecting the true cost including fees, not just the interest rate✓ Correct
CIt is required by Arizona state law in addition to federal law
DIt determines the maximum interest rate the lender may charge
Explanation
The APR includes not just the interest rate but also points, fees, and other loan costs, providing a standardized measure for comparing loan costs across different lenders. TILA's disclosure requirements allow consumers to make apples-to-apples comparisons.
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