ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Discounted present value
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Compound rate of return
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Annual percentage yield (APY)
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Annual percentage rate (APR)
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Detailed explanation-1: -With some financial products, the interest rate and the APR are different. With credit cards, though, there is no difference between interest rate and APR-they are the same. The federal Truth in Lending Act, which governs all consumer lending contracts, requires lenders to state their interest rates as APRs.
Detailed explanation-2: -While the interest rate determines the cost of borrowing money, the annual percentage rate (APR) is a more accurate picture of total borrowing cost because it takes into consideration other costs associated with procuring a loan, particularly a mortgage.
Detailed explanation-3: -Put simply, APR is the cost of borrowing on a credit card. It refers to the yearly interest rate you’ll pay if you carry a balance, and it often varies from card to card. For example, you may have one card with an APR of 9.99% and another with an APR of 14.99%.
Detailed explanation-4: -When it comes to credit cards, an APR and the interest rate charged is basically the same. The APR is the annual rate, and the interest rate that you are charged each day is the daily periodic rate, based on your APR.