Finance
A South Carolina homebuyer receives a Loan Estimate showing an APR of 6.8% on a loan with a stated interest rate of 6.5%. The difference is due to:
ACompounding interest calculations
BFees and costs included in the APR calculation✓ Correct
CInflation adjustments
DState-specific tax calculations
Explanation
The APR (Annual Percentage Rate) is higher than the stated interest rate because it includes the interest rate plus other loan costs (origination fees, points, mortgage insurance), providing a more complete cost comparison.
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