Finance
The annual percentage rate (APR) on a Missouri mortgage is higher than the stated interest rate because:
AThe APR includes only the interest
BThe APR includes the interest rate plus fees and other loan costs amortized over the loan term✓ Correct
CThe APR is set by the Federal Reserve
DThe APR is always 1% higher than the note rate by law
Explanation
APR reflects the true cost of borrowing by incorporating the interest rate plus fees (origination, points, certain closing costs) amortized over the loan term, making it higher than the stated note rate.
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