ECONOMICS
FEDERAL RESERVE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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annual rate (including fees) paid for borrowed money
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interest on a mortgage
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a bank fee
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all of the above
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Detailed explanation-1: -What does APR stand for? The APR meaning in banking is Annual Percentage Rate. APR includes any fees your lender may levy, such as processing charges, administrative fees, insurance costs, and others. As compared to AIR, it gives you a more accurate figure of the total yearly cost of a loan.
Detailed explanation-2: -A loan’s Annual Percentage Rate, or APR, is the cost of your mortgage credit as a yearly rate. Your Annual Percentage Rate is typically higher than your interest rate because it includes your interest rate plus certain fees, such as lender and mortgage broker fees, based on the specific characteristics of your loan.
Detailed explanation-3: -The Annual Percentage Rate (APR) is the cost you pay each year to borrow money, including fees, expressed as a percentage. The APR is a broader measure of the cost to you of borrowing money since it reflects not only the interest rate but also the fees that you have to pay to get the loan.
Detailed explanation-4: -The Formula for APR is: APR = (Fees + Interest) x 1 year x 100 / Principal amount, number of periods for loan. There are two types of APR, fixed APR and variable APR. The interest rate on a fixed APR does not change, while on a variable APR the interest rate does change.
Detailed explanation-5: -Step 1: Find the interest rate and charges. Step 2: Add the fees. Step 3: Divide the sum by the principal balance. Step 4: Divide by the number of days in the loan’s term. Step 5: Multiply by 365. Step 6: Multiply by 100. 17-Oct-2022