Which of the following is a true statement?

Multiple Choice

• The APR on a loan requiring monthly payments is the annual interest rate you actually pay.
• An APR is the interest rate per period divided by the number of periods per year.
• When comparing investments it is best not to rely solely on quoted rates.
• With monthly compounding, the APR will be larger than the effective annual rate.
• Compounding will typically not lead to differences between quoted and effective rates.