The annual percentage rate requires the use of the actuarial method of compounded interest when calculating the APR.

Question

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The Annual Percentage Rate (APR) is calculated using the actuarial method of compounded interest to determine the true cost of borrowing. This method takes into account the interest charged over the course of a year, including any fees or charges associated with the loan. Therefore, the use of the actuarial method is necessary when calculating the APR.

The Annual Percentage Rate Requires the Use of the Actuarial