Which are true statements about APR? Select the two correct answers.(1 point) Responses It is calculated based on the total cost of the loan. It is calculated based on the total cost of the loan. It is calculated as a percentage of the amount of the principal you have not yet paid back. It is calculated as a percentage of the amount of the principal you have not yet paid back. It stands for Annual Percentage Rate. It stands for Annual Percentage Rate. It is calculated just once, when you take out the loan.
The true statements about APR are:
1. It is calculated based on the total cost of the loan.
2. It stands for Annual Percentage Rate.
The two true statements about APR are:
1. It is calculated based on the total cost of the loan.
2. It stands for Annual Percentage Rate.
The two true statements about APR are:
1. It is calculated based on the total cost of the loan.
2. It stands for Annual Percentage Rate.
To determine the correct answers, we evaluate each statement:
1. "It is calculated based on the total cost of the loan."
This statement is true because APR takes into account various costs associated with the loan, such as interest charges, fees, and other expenses related to borrowing.
2. "It stands for Annual Percentage Rate."
This statement is also true, as APR is the acronym for Annual Percentage Rate, which represents the yearly interest rate charged on the loan.
The other statements provide incorrect information:
3. "It is calculated as a percentage of the amount of the principal you have not yet paid back."
This statement is incorrect. APR is not calculated based on the remaining unpaid principal. It considers the total cost of the loan, not the principal balance.
4. "It is calculated just once, when you take out the loan."
This statement is also incorrect. APR can be recalculated throughout the loan term, as it accounts for changes in interest rates and fees charged over time.
In summary, the correct answers are:
- It is calculated based on the total cost of the loan.
- It stands for Annual Percentage Rate.