Final answer:
Interest rates on loans are typically given as an annual percentage rate (APR), which is the standardized measure for comparing loans and savings account returns.
Step-by-step explanation:
Unless told otherwise, you can assume that the interest rate on loans is always given as an annual percentage rate (APR). The APR is a standardized measure that allows borrowers to compare different loans and savings accounts based on their annual rate of return. When you deposit money into a savings account, the bank pays you interest as a percentage of your deposits, constituting the interest rate.
Conversely, when you take out a loan to purchase items like a car or a computer, you owe interest on the borrowed money to the lender, which is also typically expressed as an annual percentage rate.The interest rate on loans is always given as an annual percentage unless told otherwise.For example, if you borrow money to buy a car and the interest rate is 5%, it means that you will be charged 5% of the loan amount each year. Similarly, if you deposit money into a savings account and the interest rate is 2%, you will earn 2% of your deposit amount each year.