Annual percentage rate is equivalent to
A)dollar cost of credit method.
B)discount method.
C)average loan balance method.
D)add-on method.
E)simple interest method.

Question

Quizplus · Accepted Answer

Annual percentage rate (APR) is calculated using the simple interest method. This method calculates the interest rate based on the total amount borrowed, without taking into account any additional fees or charges. The other methods listed, such as the dollar cost of credit method, discount method, average loan balance method, and add-on method, all involve additional calculations or fees that are not included in the APR calculation.

Annual Percentage Rate Is Equivalent to