Finance
Under the Truth in Lending Act (TILA), the Annual Percentage Rate (APR) is designed to:
AShow only the interest rate on the loan
BRepresent the true cost of credit including interest, fees, and other charges expressed as a yearly rate✓ Correct
CCalculate the monthly payment amount
DDetermine the maximum loan amount
Explanation
The APR is a standardized measure of the cost of credit that includes the interest rate plus certain fees and charges, expressed as a yearly rate. It allows consumers to compare the true cost of loans from different lenders.
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