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Annual Percentage Rate vs. Effective Annual Rates

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Please help with the following problem. Provide at least 300 words in the solution.

Do you think that lending laws should require lenders to report Effective Annual Rates (EAR) or Annual Percentage Rates (APR)? Why? What are the impacts of EARs versus APRs to the borrowers?

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Solution Summary

The following posting helps with a finance problem. This solution is an examination of the best method to provide borrowers with information on the actual costs of a loan. The explanation is given in 336 words.

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Corporate Finance

Do you think that lending laws should require lenders to report Effective Annual Rates (EAR) or Annual Percentage Rates (APR)? Why? What are the impacts of EARs versus APRs to the borrowers?
Do you think that lending laws should require lenders to report Effective Annual Rates (EAR) or Annual Percentage Rates (APR)? The lending laws should require the banks to use the APR and not the EAR. The borrower have a right to know the actual cost of the loan and the associated fees, which allows the borrowers to ...

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