Question: which one of the following statements is correct the apr is equal to the ear?
Answer: The APR is equal to the EAR for a loan that charges interest monthly. The APR on a monthly loan is equal to (1 + monthly interest rate)12 - 1. The EAR, rather than the APR, should be used to compare both investment and loan options. The APR is the best measure of the actual rate you are paying on a loan.