Questions: When you buy a car on credit, it is important to know the APR, which is the cost of the loan in dollars and cents. true interest rate of the loan total amount you will borrow. collateral your lender will require.

When you buy a car on credit, it is important to know the APR, which is the
cost of the loan in dollars and cents.
true interest rate of the loan
total amount you will borrow.
collateral your lender will require.

Transcript text: When you buy a car on credit, it is important to know the APR, which is the $\qquad$ cost of the loan in dollars and cents. true interest rate of the loan total amount you will borrow. collateral your lender will require.

Solution

Solution Steps

The question is asking about the definition of APR (Annual Percentage Rate) in the context of buying a car on credit. The APR is the true interest rate of the loan, which includes the interest rate and any additional fees or costs associated with the loan.

Step 1: Understanding APR

The Annual Percentage Rate (APR) is a measure that reflects the true interest rate of a loan. It encompasses not only the nominal interest rate but also any additional fees or costs associated with the loan.

Step 2: Analyzing the Options

We have the following options regarding the definition of APR:

Cost of the loan in dollars and cents
True interest rate of the loan
Total amount you will borrow
Collateral your lender will require

Step 3: Identifying the Correct Answer

Among the options, the one that accurately describes APR is the "true interest rate of the loan." The other options do not correctly define what APR represents.