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The simple form of an annualized interest rate is called the annual percentage rate (APR). The effective annual rate (EAR) is a Multiple Choice concept

The simple form of an annualized interest rate is called the annual percentage rate (APR). The effective annual rate (EAR) is a

Multiple Choice

  • concept that is only used because the law requires it, and is of no use to a borrower.
  • measure that only applies to mortgages.
  • less accurate measure of the interest rate paid for monthly compounding.
  • more accurate measure of the interest rate paid for monthly compounding.

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