Question

When financial institutions, such as banks or credit unions, advertise the rates on their loans, they often report APR. If you wanted to compare the interest rates on loans from different financial institutions, should you compare the APRS? Explain.

Answer 1

When comparing interest rates on loans, it is important to compare the APRs (Annual Percentage Rates) to get a more accurate understanding of the total cost of borrowing.

Step-by-step explanation:

When comparing interest rates on loans from different financial institutions, it is important to compare the APRs (Annual Percentage Rates). The APR takes into account not only the interest rate, but also any additional fees or charges associated with the loan. By comparing the APRs, you can get a more accurate understanding of the total cost of borrowing from different institutions.