Finance
Under the federal Truth in Lending Act (TILA), the Annual Percentage Rate (APR) disclosed to a Washington borrower:
AEquals the note interest rate
BReflects the true cost of borrowing including fees and interest✓ Correct
CIs always higher than the interest rate by exactly 0.5%
DIs set by the Washington DOL
Explanation
The APR, required under TILA, reflects the true cost of borrowing by incorporating the interest rate plus certain fees (points, origination fees, etc.) into a single annualized rate, allowing consumers to compare loan offers.
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