Question: Why is the effective annual rate (EAR) typically higher than the quoted nominal annual percentage rate (APR) for a loan that compounds more than once

Why is the effective annual rate (EAR) typically higher than the quoted nominal annual percentage rate (APR) for a loan that compounds more than once a year?Because EAR ignores fees while APR includes themBecause nominal APR is expressed on a monthly, not annual, basisBecause APR legally excludes any effect of interest on interestBecause interest is added to principal more than once per year, causing interest to earn interest

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