Explaining APR to Customers
Answer by Richard Insley, BOL Guru BIO AND CONTACT INFO
Question: What is a good way to explain to a customer what the Annual Percentage Rate is?
Answer: It's a unit price label of the same type you find in the grocery store. Mathematically, the APR expresses the finance charge as a percentage of the usable amount financed. The math is trickier than the unit price for a box of Wheaties because the loan value the consumer enjoys is changing as additional advances increase the amount financed and payments reduce it.
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