Finance
What does the annual percentage rate (APR) on a mortgage loan represent?
AOnly the interest rate on the loan
BThe total cost of borrowing including fees and interest expressed as a yearly rate✓ Correct
CThe lender's profit margin
DThe percentage of the purchase price required as a down payment
Explanation
The APR reflects the total cost of a loan on an annual basis, including the interest rate and certain fees such as origination points and mortgage insurance, providing a more complete cost comparison.
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