Finance
In North Dakota, the 'annual percentage rate' (APR) on a mortgage is typically higher than the interest rate because:
AThe APR includes only the interest rate
BThe APR reflects the total cost of credit including interest and certain fees over the loan term, expressed as a rate✓ Correct
CThe APR is set by the federal government
DThe interest rate includes all fees
Explanation
The APR (Annual Percentage Rate) is a broader measure of loan cost that includes the interest rate plus certain fees and costs (origination fees, mortgage broker fees, prepaid interest) spread over the loan term. Because it includes these additional costs, the APR is typically higher than the stated interest rate.
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