Which of the following statements is correct? The effective annual interest rate (EAR) is the…

The effective annual interest rate (EAR) is the true cost of borrowing and lending.

Any financial contract that calls for equally spaced and level cash flows over an infinite periods is called an annuity.

The present value of a perpetuity is less than the present value of a 100-year ordinary annuity as long as the discount rate is positive

In 1928 Congress passed the No Truth-in-Lending Act to ensure that all borrowers do not receive meaningful information about the cost of credit so that they cannot make intelligent economic decisions.

All the answers are correct.

Question 24 1 pts (TRUE or FALSE?)

With an amortized loan, the interest payments are smallest in the early years of an amortizing loan, and as the principal balance is reduced over time, the interest payments increase and less of each monthly payment goes toward paying down the principal

a. True

b. False