Finance
Under the Truth in Lending Act (TILA), the Annual Percentage Rate (APR) is designed to:
ASet maximum interest rates for all loans
BShow the true cost of borrowing including fees expressed as a yearly rate✓ Correct
CDetermine the borrower's credit score
DCalculate the lender's profit margin
Explanation
TILA requires lenders to disclose the APR, which represents the true cost of borrowing by including not just the interest rate but also fees and other loan costs, expressed as an annual percentage.
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