The method of calculating interest on a loan that is set by law is called the:
A) negotiated legal rate (NLR)
B) effective annual rate (EAR)
C) annual percentage rate (APR)
D) none of the above

Question

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The annual percentage rate (APR) is the method of calculating interest on a loan that is set by law. It includes not only the interest rate but also any additional fees or charges associated with the loan, providing a standardized way for borrowers to compare the costs of different loan options. The negotiated legal rate (NLR) refers to the interest rate that lenders and borrowers agree upon through negotiation, and the effective annual rate (EAR) is a calculation of the total cost of borrowing over the course of a year, taking compounding into account.

The Method of Calculating Interest on a Loan That Is