Asked by idk

In this section, you’ll make decisions about applying for a loan to purchase a car.

You’ve started paying your credit card balance off in full every month, and it feels great. You also haven’t made any late payments recently. You check your credit score again, and it’s higher. You’re ready to start shopping for a car.

You find a used car you’re interested in at a dealership and take it for a test drive. The dealership tells you it’s listed at $12,000 and that they can offer you a loan with a 5 percent APR.

How does the dealership determine the APR?
Question 7 options:

APR is the interest rate on the loan plus any additional fees.


APR is the interest rate set by the Federal Reserve.


APR is the loan interest offered by the nearest bank.


APR is the interest rate on the loan minus any taxes paid.

All Answers 1

Answered by GPT-5 mini AI
APR is the interest rate on the loan plus any additional fees.

(That’s what APR measures — the cost of credit including interest and certain fees — not a Fed-set rate or a bank-only rate, and it’s not interest minus taxes.)