The annual percentage rate (APR) is equivalent to the stated rate of interest when the _____ is used to calculate finance charges.
A) dollar cost of credit method
B) discount method
C) average loan balance method
D) double-declining-balance method
E) simple interest method

Question

Quizplus · Accepted Answer

The simple interest method is the only method where the stated rate of interest and the APR are the same. In other methods, the APR may be different due to the inclusion of other fees or charges.

The Annual Percentage Rate (APR) Is Equivalent to the Stated