Finance (alternative)
The Truth in Lending Act (TILA) requires lenders to disclose the Annual Percentage Rate (APR) which differs from the interest rate because APR includes:
AOnly the principal balance
BThe interest rate plus certain fees and costs of the loan✓ Correct
CProperty taxes and insurance
DThe lender's profit margin only
Explanation
APR reflects the true cost of borrowing by including the interest rate plus certain fees (points, origination fees) expressed as a yearly rate, allowing consumers to compare loan costs.
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