Finance
The Truth in Lending Act (TILA) requires disclosure of the Annual Percentage Rate (APR) because:
AAPR is always lower than the stated interest rate
BAPR includes fees and costs, providing a truer cost of credit than the nominal rate alone✓ Correct
CAPR is required only for mortgages over $1,000,000
DAPR replaces the need for a Closing Disclosure
Explanation
APR includes the interest rate plus certain fees and costs (points, origination fees, PMI) expressed as an annual rate, giving consumers a more complete picture of the cost of credit. TILA requires APR disclosure to enable comparison-shopping among loan offers.
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