ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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American Potential Risk
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Annual Percentage Rate
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Amortization Principle Rate
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Appropriation Percentage Risk
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Detailed explanation-1: -A credit card’s interest rate is the price you pay for borrowing money. For credit cards, the interest rates are typically stated as a yearly rate. This is called the annual percentage rate (APR).
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: -Annual percentage rate (APR) refers to the yearly interest rate you’ll pay if you carry a balance on your credit card. Some credit cards have variable APRs, meaning your rate can go up or down over time.
Detailed explanation-4: -APR, which stands for annual percentage rate, is the yearly cost of borrowing money. If you borrow $1, 000 for a year at a 20% APR, the total to pay back would be $1, 200.
Detailed explanation-5: -Let’s consider an example to explain the concept further. An individual takes out a $25, 000 loan to buy a car. The loan comes with a fixed APR of 5% and must be paid back over the course of five years. This means that the individual will need to make regular monthly payments of around $470.