Finance
What is the difference between APR and interest rate?
AThey are the same thing
BAPR includes the interest rate plus other loan costs (fees, points), making it typically higher than the stated interest rate✓ Correct
CInterest rate includes fees; APR does not
DAPR is used for adjustable loans; interest rate is used for fixed loans
Explanation
The APR (Annual Percentage Rate) reflects the true cost of borrowing by incorporating the interest rate plus fees such as origination fees, mortgage broker fees, and discount points. APR is typically higher than the stated interest rate.
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