Finance
In Michigan, 'Regulation Z' (Truth in Lending Act) requires creditors to disclose the 'annual percentage rate' (APR) because the APR:
AIs always lower than the note rate
BIncludes the interest rate plus certain fees and costs, providing a more complete measure of the cost of credit✓ Correct
CIs the same as the mortgage interest rate
DOnly applies to adjustable-rate loans
Explanation
APR incorporates the interest rate plus certain fees and costs (origination, points, mortgage insurance) over the life of the loan, expressed as an annual rate. This gives Michigan borrowers a standardized way to compare the true cost of different loan offers.
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