Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 16 - Rent, Interest, and Profit - Discussion Questions - Page 378: 8

Answer

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Work Step by Step

The nominal interest rate (APR) does not take into account the impact of compounding interest. Thus, when lenders are trying to make their interest rate seem lower, they will tell you the nominal rate.
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