The EAR associated with credit cards is actually the nominal rate and is less than the APR.

Name: The EAR associated with credit cards is actually the nominal rate and is less than the APR.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The EAR (effective annual rate) is the actual rate that includes compounding while the APR (annual percentage rate) is the nominal rate that does not include compounding. Therefore, the statement is false as the EAR is typically higher than the APR for credit cards.

The EAR Associated with Credit Cards Is Actually the Nominal