Which one of the following statements concerning the annual percentage rate is correct?
A) The stated interest rate considers interest on interest.
B) The rate of interest you actually pay on a loan is called the stated interest rate.
C) The annual percentage rate is lower than the annual percentage rate when an interest rate is compounded quarterly.
D) When firms advertise the stated interest rate they are violating European truth-in-lending laws.
E) The stated interest rate equals the annual percentage rate when the rate on an account is designated as simple interest.
Correct Answer:
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