CHAPTER 4 QUESTIONS 6. 5. What is the difference between the annual percentage rate (APR) and the effective annual rate (rear)? When/how is each used? What is the relationship between these two measures? When financial institutions, such as banks or credit unions, advertise the rates on their loans, they often report the APR. If you wanted to compare the interest rates on loans from different financial institutions, should you compare the APRs? Explain your reasoning. 7. What is an amortized loan, and what are the characteristics of an amortized loan payment? What is an amortization schedule, and how is it used